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A Simulation Analysis of Transmission - Constrained Oligopoly in the Wholesale Electricity Market (Japanese)

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  • TANAKA Makoto

Abstract

Exercise of market power by dominant generators is recognized as a serious issue in restructured wholesale electricity markets. Oligopolistic generators that participate in the electricity market on a nationwide scale could act strategically by taking into account the limited capacity of inter-regional transmission lines. In this paper, we consider a transmission-constrained Cournot model, using a mathematical program with equilibrium constraints (MPEC). We then present a simulation analysis of the Japanese wholesale electricity market, which is divided into nine regions linked by interconnection lines. Specifically, this paper examines how the divestiture of dominant players' power plants located in different regions will affect the Cournot equilibrium.

Suggested Citation

  • TANAKA Makoto, 2006. "A Simulation Analysis of Transmission - Constrained Oligopoly in the Wholesale Electricity Market (Japanese)," Discussion Papers (Japanese) 06010, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:rdpsjp:06010
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    File URL: https://www.rieti.go.jp/jp/publications/dp/06j010.pdf
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    Cited by:

    1. Tanaka, Makoto, 2009. "Transmission-constrained oligopoly in the Japanese electricity market," Energy Economics, Elsevier, vol. 31(5), pages 690-701, September.
    2. TANAKA Makoto, 2007. "Oligopolistic Competition in the Japanese Wholesale Electricity Market: A Linear Complementarity Approach," Discussion papers 07023, Research Institute of Economy, Trade and Industry (RIETI).

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