Evaluating Market Power in Congested Power Systems by Kollin

RED-BORDERED FORM Coming from Australia iii ABSTRACT In this thesis, a linear programming algorithm is developed for determining a measure of market concentration in congested transmission systems. The linear program uses the effects of the congestors on the system to derate the line limits of each transmission line. The derated line limits allow for the congestor's contribution to the system flows to be taken into account when examining the available market for additional buyers and sellers in the system. The linear program uses transmission line constraints with derated line limits and generation constraints to calculate the maximum simultaneous interchange capability for a group of buyers and sellers on the system. The results of the linear program provide information regarding the maximum amount of power the buyers can import, as well as the amount of generation each seller can provide towards the simultaneous interchange. When only a few of the available sellers can participate in the maximum simultaneous interchange capability of the buyers, the market of available generation is referred to as concentrated. Each seller's contribution, as determined by the simultaneous interchange capability algorithm, can be used in determining a Herfindahl-Hirschman index (HHI) of concentration for the market. The resulting HHI value can then be compared to government standards for HHI regarding market power in the electricity industry. Finally, sample applications of the maximum simultaneous interchange capability algorithm are examined. These examples are used to discuss the ramifications of congestion on the transmission system's concentration and the usefulness of the derated line limit solution method for determining market concentration. iv ACKNOWLEDGMENTS I would like to thank Professor Thomas Overbye for his knowledge, guidance, and support throughout my graduate studies. I would also like to thank the University of Illinois Power Affiliates Program and the University of Illinois Graduate College for their generous financial support. for their guidance and support throughout my undergraduate and graduate studies at the University of Illinois. I would like to thank Mark Laufenberg and PowerWorld Corporation for their aid and support during my graduate studies. The use of their product was invaluable to my research. I would like to thank my parents for their generous contributions and support during my undergraduate studies. I would like to thank my brother for his electrical engineering and power engineering knowledge and advice. I would like to thank my sister and her family for their support. Finally, I would like to …