Effect of Market Power in Electricity Markets

The main objective of this paper is to show an overview analysis of market power issues. Market power reflects the scarcity of power supply. It is the ability of a particular seller or group of sellers to maintain prices profitably above competitive levels for a significant period of time. Because the electric power system has its own characteristics that are different to other economic systems, both physical factors and economic factors of power system are key elements on this definition. We study some cases here, including different line limit levels, load levels and bid strategy through a market model based on OPF (optimal power flow) with a decommitment algorithm.