Analysis of electricity market rules and their effects on strategic behavior in a noncongestive grid

  • Seeley K
  • Lawarrée J
  • Liu C
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&ar~ier work has discussed the potential for strategic bidding in deregulated electricity markets, and shown specifically how generators can take advantage of congestion in their Strategy. We show that it is also possible for even mid-price suppliers to create Congestion problems throiigli ginning in a noncongestive system. Under auction mechanisms such as in the United Kingdom, this can he profitable, at the consumer’s expense. The optimal auction prevents profitable gaming, but requires the simiiltaneous handling of market clearing and system dispatch, making it harder to ensure the neutrality of system operations. Index

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