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New entries in the electricity market : Choosing the best location for a new generating unit

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Petoussis, Andreas G., Petoussis, S. G., Zhang, X.-P. and Godfrey, Keith (2008) New entries in the electricity market : Choosing the best location for a new generating unit. In: 3rd International Conference on Electric Utility Deregulation, Restructuring and Power Technologies, Nanjing, China, Apr 06-09, 2008. Published in: Proceedings of the 3rd International Conference on Electric Utility Deregulation, Restructuring and Power Technologies, Volume 1 pp. 61-65.

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Abstract

The liberalization of the electricity sector has introduced competition at the generation level and gives incentives to new generating firms to attempt to enter the electricity market. However, due to the complexities related to the electrical energy trade, the newcomers should proceed only after careful decisions about their future plans and strategic actions. The following research shows that the choice of the location for installing new generating units is a crucial consideration. This paper presents a method for determining the best location for installing a new generator. A novel electricity market model that employs linear supply function equilibrium theory and utilizes the nonlinear AC power network representation is used for calculating the market equilibrium. The research focuses on the effect of the location of the new unit on the profits of both the new firm and the existing companies. The impact on the social welfare, nodal prices and bidding strategies is also discussed. It is shown that, under certain circumstances, the new entry may seriously reduce the profit of an existing firm, leading to economic failure.

Item Type: Conference Item (Speech)
Subjects: H Social Sciences > HB Economic Theory
T Technology > TK Electrical engineering. Electronics Nuclear engineering
Divisions: Faculty of Science > Engineering
Library of Congress Subject Headings (LCSH): Electric utilities -- Deregulation, Equilibrium (Economics), Electric power production -- Economic aspects, Electric utilities -- Economic aspects, Electric power systems -- Mathematical models
Journal or Publication Title: Proceedings of the 3rd International Conference on Electric Utility Deregulation, Restructuring and Power Technologies
Publisher: Institute of Electrical and Electronics Engineers
ISBN: 978-7-5641-1249-3
ISSN: ISBN: 978-7-900714-13-8
Official Date: 2008
Volume: Volume 1
Number of Pages: 5
Page Range: pp. 61-65
Identification Number: 10.1109/DRPT.2008.4523380
Status: Not Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Conference Paper Type: Speech
Title of Event: 3rd International Conference on Electric Utility Deregulation, Restructuring and Power Technologies
Type of Event: Conference
Location of Event: Nanjing, China
Date(s) of Event: Apr 06-09, 2008
References:

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URI: http://wrap.warwick.ac.uk/id/eprint/29412

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