A new method for evaluation Market Power and identification of dominant suppliers in reactive power markets

Market power normally is defined as the ability to profitably alter prices away from competitive levels. Market power is a significant issue for restructured electricity markets around the world. One of the concerns for any power market is whether individual participants can increase their profits by withholding generation from the market. To address this concern, the existence of some tools and indices for identification of dominant suppliers with more potential of exercising market power and controlling them is so important. Market power problems are more complicated in reactive power markets than those in other markets due to the specific properties of this ancillary service. Market power problem in reactive power markets is investigated and analyzed in this paper. A new index for assessment the potential of reactive suppliers to exercise market power is presented in this paper. Reactive must procurement (RMP) is introduced as the minimum capacity of reactive power which must be provided by a reactive resource (whether in generation or absorption mode) to supply reactive requirements of system considering generation and transmission constraints. The proposed index is illustrated using IEEE 57- bus test system.