chenyewu AT

back to Research
Is deregulated electricity market really competitive?
A growing interest has been devoted toward deregulating the electricity market in order to assure competitive electricity prices. The California electricity crisis, however, has shown the deregulation not very successful due to the exercise of market power. This challenges the common belief: does deregulation imply competition? Together with Professors Adam Wierman and Hamed Mohsenian-Rad, upon careful review, I realize that electricity markets are particularly difficult environments in which to mitigate market power. More specifically, congestion fragments the transmission system into smaller zones, and the markets within these zones may be highly concentrated, even when the whole transmission system seems competitive. This implies the significance of real-time market power monitoring for power systems. In contrast to the previously developed index-based measures for market power, we proposed a new functional market power measure, termed transmission constrained network flow [1,2]. Our measure unified three large classes of long-term transmission constrained market power indices in the literature: residual supply based, network flow based, and minimal generation based. Furthermore, we found that it is suitable for demand-response and renewable integration and hence more amenable to monitor market power in the future smart grid. This work won the Best of Best Paper Award in IEEE PES general meeting, 2013.
In the future, I plan to exploit the rich information behind our functional measure for long term market power, and elaborate on the short term market power measures, which are even harder due to the variations in demand and generation across time. Ultimately, I want to design an electricity market analysis toolbox to better serve the future power system.
Related Publications:
1.  Chenye Wu, Subhonmesh Bose, Adam Wierman, Hamed Mohsenian-Rad, A Unifying Approach to Assessing Market Power in Deregulated Electricity Markets, In Proc. of IEEE Power and Energy Society General Meeting 2013, vol., no., pp.1,5, 21-25 July 2013, doi: 10.1109/PESMG.2013.6672907.
2.  Subhonmesh Bose, Chenye Wu, Yujian Xu, Adam Wierman, Hamed Mohsenian-Rad, A Unifying Market Power Measure for Deregulated Transmission-Constrained Electricity Markets, accepted by IEEE Trans. on Power Systems.