Analysis of electricity market rules and their effects on strategic behavior in a noncongestive grid

Earlier work has discussed the potential for strategic bidding in deregulated electricity markets, and shown specially how generators can take advantage of congestion in their strategy. The authors show that it is also possible for even mid-price suppliers to create congestion problems through gaming in a noncongestive system. Under auction mechanisms such as in the United Kingdom, this can be profitable, at the consumer´s expense. The optimal auction prevents profitable gaming, but requires the simultaneous handling of market clearing and system dispatch, making it harder to ensure the neutrality of system operations