Managing unilateral market power in electricity

This paper first describes those features of the electricity supply industry that make a prospective market monitoring process essential to a well-functioning wholesale market. Some of these features are shared with the securities industry, although the technology of electricity production and delivery make a reliable transmission network a necessary condition for an efficient wholesale market. These features of the electricity supply industry also make antitrust or competition law alone an inadequate foundation for an electricity market monitoring process. This paper provides examples of both the successes and failures of market monitoring from several international markets. More than 10 years of experience with the electricity industry restructuring process has shown that market failures are more likely and substantially more harmful to consumers than other market failures because of how electricity is produced and delivered and the crucial role it plays in the modern economy. Wholesale market meltdowns of varying magnitudes and durations have occurred in electricity markets around the world, and many of them could have been prevented if a prospective market monitoring process backed by the prevailing regulatory authority had been in place at the start of the market.Access to Markets,Markets and Market Access,Environmental Economics&Policies,Energy Markets,Economic Theory&Research

Lessons from international experience with electricity market monitoring

The author first describes those features of the electricity supply industry that make a prospective market monitoring process essential to a well-functioning wholesale market. Some of these features are shared with the securities industry, although the technology of electricity production and delivery make a reliable transmission network a necessary condition for an efficient wholesale market. These features of the electricity supply industry also make antitrust or competition law alone an inadequate foundation for an electricity market monitoring process. The author provides examples of both the successes and failures of market monitoring from several international markets. More than 10 years of experience with the electricity industry restructuring process has shown that market failures are more likely and substantially more harmful to consumers than other market failures because of how electricity is produced and delivered and the crucial role it plays in the modern economy. Wholesale market meltdowns of varying magnitudes and durations have occurred in electricity markets around the world, and many of them could have been prevented if a prospective market monitoring process backed by the prevailing regulatory authority had been in place at the start of the market.Access to Markets,Markets and Market Access,Environmental Economics&Policies,ClimateChange,Health Economics&Finance

An intelligent broker agent for energy trading:an MDP approach

This paper details the development and evaluation of AstonTAC, an energy broker that successfully participated in the 2012 Power Trading Agent Competition (Power TAC). AstonTAC buys electrical energy from the wholesale market and sells it in the retail market. The main focus of the paper is on the broker’s bidding strategy in the wholesale market. In particular, it employs Markov Decision Processes (MDP) to purchase energy at low prices in a day-ahead power wholesale market, and keeps energy supply and demand balanced. Moreover, we explain how the agent uses Non-Homogeneous Hidden Markov Model (NHHMM) to forecast energy demand and price. An evaluation and analysis of the 2012 Power TAC finals show that AstonTAC is the only agent that can buy energy at low price in the wholesale market and keep energy imbalance low

EKSISTENSI PASAR INDUK “PUSPA AGRO” DALAM PERSPEKTIF PEMANGKU KEPENTINGAN

Wholesale market "Puspa Agro" is the most complete and largest market in Indonesia. Of course, the main market "Puspa Agro" will also experience growth whether it be better or worse. The physical and non-physical wholesale market "Puspa Agro" in Jemundo tman Sidoarjo district still needs improvements and additions. Due to inadequate infrastructure resulted in the wholesale market "Puspa Agro" in the village of Sidoarjo Regency Park District Jemundo progressing less good and did not work as the original concept. Market Up "Puspa Agro" East Java is now better known as Puspa Agro. Market Up "Puspa Agro" Java is designed as part of the infrastructure to realize the vision and mission of East Java development as a center of agribusiness. The role planned for the wholesale market "Puspa Agro" in the medium to long-term development pattern is a precursor to the establishment of agro-industries as economic support of East Java. Generally wholesale market in Indonesia faces many challenges such as limited space on a narrow stall, irregular and weak management. Weaknesses of management systems has become an important cause of failure of one of the functions of a market, so it can not fulfill the original purpose as a promoter of the regional economy. Held immediately reform the wholesale market "Puspa Agro" Jemundo tman Sidoarjo district, especially the problem of infrastructure remain major obstacles such as access roads, the central market "Puspa Agro" and facilities that need to be addressed and coupled

Retail and Wholesale Market Power in Organic Foods

The demand for organic fresh fruits and vegetable continues to grow at a rate far higher than the rest of the produce industry. The cost of meeting organic certification standards, however, has meant that supply has been slow to adjust. With limited supply, we hypothesize that organic suppliers enjoy more market power in bargaining over their share of the retail-production cost margin for fresh apples. We test this hypothesis using a random parameters, generalized extreme value demand model (mixed logit) combined with a structural model of retail and wholesale pricing that allows conduct to vary by product attributes (organic or non-organic) and time. We find that organic growers do indeed earn a larger share of the total margin than non-organic growers, but this vertical market power is eroding over time as market supply adjusts.organics, market power, mixed logit, game theory, non-linear pricing., Industrial Organization, C35, D12, D43, L13, L41, Q13.,

Relacionamento de preços no mercado nordestino de tomate

The objective this paper is to analyze the relationships in the prices on the tomatoes wholesale market prices of Fortaleza (CE), Ibiapaba (CE), Recife (PE) e Salvador (BA). Time series methods were used: unit root test, Johansen co-integration test, VAR models, and variance decomposition of prediction error and impulse response function. The results showed that the prices of Fortaleza influencies the wholesale market of Ibiapaba (CE), Recife (PE) e Salvador (BA).Wholesale market, Price transmission, VAR model, Tomatoes, Demand and Price Analysis,

The Buenos Aires Central Wholesale Market (BACWN): A Case of Multiple Power

The Buenos Aires Central Wholesale Market is a place where a lot of social and political relationships with different degrees of power are developed. Since this market was opened in 1984, the participating actors have faced several internal and external transformations, such as the implementation of neo liberal policies, changes in the Market’s administrative rules and the introduction of new actors in the retail distribution chain. Therefore, this article shows how international economic processes and policies become embedded in local distribution systems, and focuses on the spatial and social variability, i.e. the multiplicity of local social actors and interests involved in the globalization process. The article aims at exploring the creation of the Buenos Aires Central Wholesale Market as a constructed process linked with different kinds of social and political interests and motivations. In this respect, we combined the theoretical framework of political economy and the actor-oriented approach along with different ethnographic tools. The first one helps us to analyse the macro-dynamics of the market, whereas the second one allows us to analyse how people experience global processes in this particular social space. By doing so, we studied the strategies that actors developed in order to confront changes. Since the opening of the Buenos Aires Wholesale Market, these changes have modified the degree of economic and social relevance of the Market, thus generating different degrees of power in the actors involve

Vertical Integration and Market Power in Electricity Markets

Vertical separation of generation from electricity retailing has often been required as a condition of electricity market liberalisation. A well-developed and liquid contracts market is similarly suggested as necessary to manage the resulting wholesale market risks which risks are further exacerbated by competition. Such contracts markets are rare however and increasingly evidence is emerging that vertical integration is associated not just with improved wholesale market risk management but also reduced wholesale market power. This paper develops a theoretical model showing that non-vertically integrated generators will over-report their inverse supply curves with the incentive to over-report increasing with the firm's share of generating capacity. Conversely in a vertically integrated industry no over-reporting occurs when integrated firms have balanced shares in wholesale and retail markets. In general firms whose share of generating capacity is higher (lower) than their retail market share will over-report (under-report) their inverse supply functions. Integration is found to affect retail electricity prices only via its effect on retail marginal costs. We find that retail prices are higher with vertical separation than with either balanced integration or full integration without a wholesale market. These results suggest a re-evaluation of the importance of generator wholesale market power in vertically integrated electricity industries and of measures to improve retail market competitiveness under either vertical integration or separation