Strategic Behavior in Market-based Redispatch: International Experience

Martin  Palovic; Christine Brandstätt; Gert  Brunekreeft; Marius  Buchmann

doi:10.1016/j.tej.2022.107095

Strategic Behavior in Market-based Redispatch: International Experience

Martin Palovic^*, Christine Brandstätt, Gert Brunekreeft, Marius Buchmann

^*Corresponding author for this work

Jacobs University Bremen

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

This study reviews international experience with market based redispatch. It focuses on two manifestations of strategic behavior: abuse of market power and so-called inc-dec gaming. Two central arguments are derived from the review. First, reviewed countries explain strategic behavior by the lack of competition within congestion regions and primarily as a result of market power. Inc-dec gaming, if present, is recognized as a problem only in combination with market power exercise. Second, strategic behavior can be effectively addressed with countermeasures. In result, the potential for strategic behavior within market based redispatch does not seem to justify rejecting its implementation.

Original language	English
Article number	107095
Journal	The Electricity Journal
Volume	35
Issue number	3
Number of pages	9
ISSN	1040-6190
DOIs	https://doi.org/10.1016/j.tej.2022.107095
Publication status	Published - Apr 2022
Externally published	Yes

Keywords

Market-based redispatch
Market power
Inc-dec
Gaming
Strategic Behavior

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Cite this

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title = "Strategic Behavior in Market-based Redispatch: International Experience",

abstract = "This study reviews international experience with market based redispatch. It focuses on two manifestations of strategic behavior: abuse of market power and so-called inc-dec gaming. Two central arguments are derived from the review. First, reviewed countries explain strategic behavior by the lack of competition within congestion regions and primarily as a result of market power. Inc-dec gaming, if present, is recognized as a problem only in combination with market power exercise. Second, strategic behavior can be effectively addressed with countermeasures. In result, the potential for strategic behavior within market based redispatch does not seem to justify rejecting its implementation.",

keywords = "Market-based redispatch, Market power, Inc-dec, Gaming, Strategic behavior, Market-based redispatch, Market power, Inc-dec, Gaming, Strategic Behavior",

author = "Martin Palovic and Christine Brandst{\"a}tt and Gert Brunekreeft and Marius Buchmann",

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journal = "The Electricity Journal",

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AU - Palovic, Martin

AU - Brandstätt, Christine

AU - Brunekreeft, Gert

AU - Buchmann, Marius

PY - 2022/4

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N2 - This study reviews international experience with market based redispatch. It focuses on two manifestations of strategic behavior: abuse of market power and so-called inc-dec gaming. Two central arguments are derived from the review. First, reviewed countries explain strategic behavior by the lack of competition within congestion regions and primarily as a result of market power. Inc-dec gaming, if present, is recognized as a problem only in combination with market power exercise. Second, strategic behavior can be effectively addressed with countermeasures. In result, the potential for strategic behavior within market based redispatch does not seem to justify rejecting its implementation.

AB - This study reviews international experience with market based redispatch. It focuses on two manifestations of strategic behavior: abuse of market power and so-called inc-dec gaming. Two central arguments are derived from the review. First, reviewed countries explain strategic behavior by the lack of competition within congestion regions and primarily as a result of market power. Inc-dec gaming, if present, is recognized as a problem only in combination with market power exercise. Second, strategic behavior can be effectively addressed with countermeasures. In result, the potential for strategic behavior within market based redispatch does not seem to justify rejecting its implementation.

KW - Market-based redispatch

KW - Market power

KW - Inc-dec

KW - Gaming

KW - Strategic behavior

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KW - Market power

KW - Inc-dec

KW - Gaming

KW - Strategic Behavior

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DO - 10.1016/j.tej.2022.107095

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