- This event has passed.
We have the pleasure to announce Christoph Graf (Stanford) as the next speaker in our CERNA research seminar. The seminar will take place Wednesday 18 May 2022 at 12:30pm in Salle Vendome. The zoom log-in information will be distributed in due time.
Christoph will talk about
Measuring the Ability to Exercise Unilateral Market Power in Locational-Pricing Markets: An Application to the Italian Electricity Market
(joint with Frank Wolak)
An increasing number of wholesale electricity markets employ locational pricing mechanisms where energy prices account for some or all aspects of the transmission network configuration. A major concern of regulators is that suppliers may have the ability to exercise unilateral market power by impacting the extent to which these transmission constraints bind. We extend the residual demand curve as a measure of the ability of a supplier to exercise unilateral market power in a single price market to residual demand hyper-surfaces in locational pricing markets. We show that accounting for the fact that firms face residual demand hyper-surfaces improves our ability to predict the offer curves submitted by strategic suppliers. We complement this best-reply offer curve analysis with an equilibrium analysis that simultaneously accounts for how the locational output choices of all strategic firms impacts electricity flows and locational prices. We use both approaches to analyze the extent to which divestment of the same amount of generation capacity at different locations ultimately benefits final consumers.