Supply Function Equilibria in Networks with Transport Constraints

Abstract

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Renewable Electricity Policy and Market Integration

“…Lower congestion rent would have a negative effect on transmission investment even under regulation. 11 A pro-competitive effect of market integration arises under imperfect competition because transmission bottlenecks limit competition (Holmberg and Philpott, 2012). This additional externality suggests that distortions of market integration associated with domestic RES-E policies are equally and perhaps even more substantial under imperfect product market competition.…”

Supply Function Competition in Electricity Markets with Flexible, Inflexible, and Variable Generation

“…SFE models with capacity constraints are considered by Green and Newbery (1992), Baldick et al (2004), Holmberg (2007), Anderson and Hu (2008), Genc and Reynolds (2011) and Anderson (2013). SFE models with network transmission constraints are studied by Berry et al (1999), Wilson (2008), and Holmberg and Philpott (2012). This paper complements these studies by focusing on firms' production-adjustment constraints.…”

Equilibrium supply security in a multinational electricity market with renewable production

“…The analysis of electricity markets under transmission constraints is notoriously di¢ cult, especially under the assumption of strategic interaction among players. One reason is that optimal behavior is discontinuous at trading volumes around which the constraint is just binding; see Holmberg and Philpott (2012) The timing of the game is as follows. The policy makers in the two countries procure capacity reserves (k 1 ; k 2 ) in the …rst stage.…”