Finance

Electrical engineering

Physics

Market mechanism

Mathematics

Bidding

Mathematical optimization

Macroeconomics

Limit (mathematics)

Engineering

Mathematical analysis

Clearing

Optimization problem

Electricity market

Market clearing

Economics

Power (physics)

Microeconomics

Market power

Electricity

Geometry

Constraint (computer-aided design)

Computer science

Quantum mechanics

Monopoly

Electric power system

Bilevel optimization

IEEE Transactions on Power Systems

Market power has been a problematic issue for fair and transparent trades in various electricity markets. To deal with the problems of existing market power mitigation methods, such as complicated judgment criteria, excessive supervision probability, impersonal cost data accounting, and the requirements on perfect information circumstances, a novel spot market power mitigation clearing mechanism (MPMCM) is proposed, which manages to limit potential market power execution while avoiding overregulation and maintaining a real market supply-demand situation. The MPMCM consists of three processes, namely, market power evaluation, bidding capacity division, and bidding capacity constraint. The MPMCM is transformed into a set of bidding constraints and properly integrated in the common market clearing procedure. A bilevel mathematical problem with equilibrium constraints market equilibrium model is proposed to formulate the MPMCM for market simulation, and the mixed integer linear problem reformulation of the bilevel model is derived. Finally, an illustrative example is proposed to observe the strategic behaviors under various situations, thereby proving the validity and effectiveness of the MPMCM. A large-scale numerical example based on a modified IEEE 200-node system is proposed to prove the adaptivity of the MPMCM.

Market Power Mitigation Clearing Mechanism Based on Constrained Bidding Capacities