The review of market power detection tools in organised electricity markets

Abstract

Market power and its possible abuse by market participants is one of the main issues in electricity trading and a lot of work is done on establishing trading rules for fair and transparent electricity market. The focus of this paper is to present market power detection techniques which have been proposed in literature with detail review of the tools which could be used in monitoring units of organised electricity market places such as power exchanges. Electricity markets are disposed to collective or collusive market power exercise because of their characteristics and additionally susceptible to the potential exercise of unilateral market power. There have been many insight researches on topic of market power in the deregulated wholesale electricity markets with arising questions how to define, exercise and detect market power. The paper distinguishes between different models for market monitoring and surveillance and the outcomes of the paper can serve as a recommendation and orientation for further tests and researches in the field of the monitoring of market power.