Concentration and capacity effects on electricity market power

The paper reports experimental results for a computational double auction electricity market and compares them to the results that would hold under competitive equilibrium. The computational market is designed to simulate a deregulated electricity market. A genetic algorithm is used to simulate the learning mechanism used by buyers and sellers. Each simulation has parameters that can be set to investigate the relationships between different ratios of buyers and sellers with different ratios of buying and selling capacity. The market power of buyers and sellers is individually and collectively measured in terms of deviations from competitive equilibrium. We examine how this market power varies with changes in concentration and capacity