reactive market power analysis using must run indices this paper investigates the issues of reactive power must run capacity in power system operations hence in electricity markets a must run index based method is proposed in the paper to measure the market power held by reactive power suppliers the nordic 32 bus system and the ieee 118 bus system are used to test the proposed method the market power holders of reactive power found using the proposed method are in accord with that found in the realistic nordic system operation and in the existing analysis of ieee 118 bus system the paper identifies through must run indices possible conditions that could lead to market power in the case of applying a bid structure within a market framework furthermore market structure drawbacks can cause the appearance of market power even in a topologically ideal system

a novel cost reducing reactive power market structure for modifying mandatory generation regions of producers abstract in this paper a new reactive power market structure is studied and presented active power flow by itself causes active and reactive losses considering such losses in the reactive power market is the main purpose of this paper therefore this study attempts to improve the reactive power market and create fair competition between producers to that end first a new allocation method for reactive power losses is presented and the contribution of each producer in reactive losses is calculated in the next step this share of losses is used to modify the mandatory generation region of units then a new structure is proposed for the reactive power market this novel structure leads to reduction of system costs in the deregulated power system which is one of the main policy implications of this paper finally simulations show that the total payment by independent system operator will be reduced via application of the proposed methods leading to reduction in system costs this cost reduction will be significant enough to encourage independent system operators to utilize such a structure in addition by implementing the new proposed methods assignment of costs related to reactive power loss will be more justifiable for each generator

planned obsolescence and the r d decision by investing in rd i e the r d choice that maximizes current profitability does not maximize overall profitability the result is that if output is sold rather than rented then in its r d decision the monopolist has an incentive to practice a type of planned obsolescence that lowers its own profitability

towards a competitive market for reactive power this paper presents the design of a competitive market for reactive power ancillary services generator reactive power capability characteristics are used to analyze the reactive power costs and subsequently to construct a bidding framework the reactive power market is settled on uniform price auction using a compromise programming approach based on a modified optimal power flow model the paper examines market power issues in these markets and identifies locations where strategic market power advantages are present that need to be removed through investments in reactive power devices

network externality compatibility choice and planned obsolescence this paper attempts to provide a formal theory of planned obsolescence based on incompatible technologies in the presence of network externalities the author explores how a monopolist s ability to make the new product incompatible with the old version of a product constrains the optimal dynamic behavior of the monopolist the social optimum and the market equilibrium are compared finally the possibility of quality distortion is considered as a commitment mechanism to the future compatibility choice copyright 1994 by blackwell publishing ltd

durable goods monopoly with entry of new consumers this paper analyzes a model of a dynamic monopolist who produces at constant unit cost each period a new cohort of consumers enters the market each entering cohort is identical consumers within a cohort have different tastes for the good my main results are if players are sufficiently patient any positive average profit less than the maximum feasible level can be attained in a subgame perfect equilibrium in the subset of subgame perfect equilibria in which players use stationary strategies the seller cannot make sales at prices significantly greater than the lowest willingness to pay when period length goes to zero and the seller attains the maximum profit when commitment is feasible by charging the same static monopoly price in every period this paper analyzes a model of a dynamic monopolist who operates in a market in which there is a regular flow of new consumers the seller produces a durable good at constant unit cost each period a new cohort of consumers enters the market consumers wish to buy exactly one unit of the item but are willing to wait resales are not allowed each entering cohort is identical

the effects of learning by doing on product innovation by a durable good monopolist abstract we analyze a durable good monopolist s decision to adopt a new and more efficient technology that is readily available at very low or zero adoption cost after an initial period of learning by doing the new technology makes the good more attractive to consumers anticipating a better product consumers delay their current purchases which lowers today s profits but increases future profits since the monopolist can charge a higher price for the high quality good we show that the effect on overall profit depends on variables such as the degree of innovation for certain parameter values the monopolist adopts the innovation even when it is not first best to do so we also provide conditions under which the monopolist finds it optimal to continue using the inferior production technology even if the innovation is freely available the latter result provides a possible rationale for a firm to hold on to a sleeping patent when its use is socially desirable

durable goods monopolists durable goods monopolists face special problems because the sale of their products creates a secondhand market not controlled by the monopolist to the extent the monopolist is able to rent his product rather than sell it or to make binding promises about his future production such problems are ameliorated given the inability to do the above the monopolist is led to producing goods less durable than those produced by either competitive firms or monopolist returns a reverse averch johnson result that monopolist sellers may invest less in fixed costs including plant modernization and research and development than would the renters is shown it is also shown that even though sellers have less monopoly power than renters and nondurable goods monopolists it is possible that the seller will cause a greater deadweight loss than the other types of monopolies

stochastic multiobjective market clearing of joint energy and reserves auctions ensuring power system security in this paper a stochastic multiobjective framework is proposed for day ahead joint market clearing the proposed multiobjective framework can concurrently optimize competing objective functions including augmented generation offer cost and security indices overload index voltage drop index and voltage stability margin besides system uncertainties including generating units and branches contingencies and load uncertainty are explicitly considered in the stochastic market clearing scheme the solution methodology consists of two stages which firstly employs roulette wheel mechanism and monte carlo simulation mcs for random adaptive 24 h scenario generation wherein the stochastic multiobjective market clearing procedure is converted into its respective deterministic equivalents scenarios in the second stage for each deterministic scenario a multiobjective mathematical programming mmp formulation based on the epsiv constrained approach is implemented for provision of spinning reserve sr and nonspinning reserve nsr as well as energy the mmp formulation of the market clearing process is optimized while meeting ac power flow constraints and expected interruption cost eic the ieee 24 bus reliability test system rts 24 bus is used to demonstrate the performance of the proposed method

cost benefit reflective distribution charging methodology this paper describes the principle and implementation of a new mw mvar miles charging methodology which was developed to reflect three key cost drivers in distribution network development the distance used to support nodal real and reactive power injection withdrawal the degree of support offered by the network assets and the operating condition of the supporting assets in terms of their power factors the inclusion of the latter driver allows the developed charging methodology to reward network users who are contributing to better power factors and better network utilization while penalizing customers who worsen power factors and network utilization as a consequence the charging model is able to provide forward looking incentives for network customers to behave in a manner to better the network condition which will in turn help to reduce the cost of future network development in addition the separation of real and reactive power pricing would give network users clear indications of the cost of their reactive power draw from the network which in turn could help them to evaluate the economics in investing in reactive power compensation devices the proposed charging methodology is demonstrated on a practical eight busbar distribution system with a mixed demand and embedded generation eg this paper results from work undertaken in a project on distribution charging methodologies for western power distribution the views in this paper expressed are not those of western power distribution

oligopolistic competition of gencos in reactive power ancillary service provisions the need for a market based approach for reactive power procurement has been recognized by ferc due to the localized characteristic of reactive power regulatory mechanisms are necessary to mitigate the possibility of holding market power by generators the regulator is responsible for devising the regulatory mechanisms that provide incentives to generators to supply reactive power while preventing the abuse of market power this paper proposes a mathematical model to simulate the strategic behavior of generators supplying reactive power while considering the system operator s schedule the proposed method can be used by the regulator to simulate the market behavior in the reactive power supply we further study how regulatory policies affect the strategic behavior an alternative price cap method has been proposed and tested in the numerical example to mitigate the effect of strategic behavior of generators in reactive power procurement by the system operator the numerical examples are tested on the nordic 32 bus system

an economic theory of planned obsolescence planned obsolescence is the production of goods with uneconomically short useful lives so that customers will have to make repeat purchases however rational customers will pay for only the present value of the future services of a product therefore profit maximization seemingly implies producing any given flow of services as cheaply as possible with production involving efficient useful lives this paper shows why this analysis is incomplete and therefore incorrect monopolists are shown to desire uneconomically short useful lives for their goods oligopolists have the monopolist s incentive for short lives as well as a second incentive that may either increase or decrease their chosen durability however oligopolists can generally gain by colluding to reduce durability and increase rentals relative to sales some evidence is presented that appears to be generally consistent with the predictions of the theory

quality choice and the coase problem abstract this paper studies the quality choice made by a durable good monopolist to alleviate the coase problem the durable good monopolist not only over supplies the quality but decreases the price per unit of quality so that the high demand consumers do not postpone their purchase

running a more complete market with the slp iv acopf the acopf is at the core of competitive electricity market design it is the only ac based algorithm that simultaneously co optimizes real and reactive power dispatch for steady state operations on ac power systems in practice independent system operators isos oversimplify the physical problem and settle the markets on locational marginal price lmps based on real power but do not price reactive power dispatch or voltage control this work proposes a market dispatch and pricing procedure based on the acopf to provide a more complete pricing mechanism we formulate the dual problem of the slp iv acopf as shown in 1 which is a successive linear program shown to solve the acopf to an acceptable quality of convergence to a best known solution with linear scaling of computational time in proportion to network size therefore the dual problem is also a linear program as a result the marginal value pricing of the optimal solution to the dual problem supports the market dispatch due to strong duality i e this solution technique results in a revenue adequate and more complete market design furthermore we show how to distribute the complete real time market settlements the analysis includes a direct comparison to dcopf based approaches similar to those applied in current iso markets

localized reactive power markets using the concept of voltage control areas in this paper we present the design of a localized competitive market for reactive power ancillary services at the level of individual voltage control areas the concept of electrical distance has been used to identify the different voltage control areas within a power system the proposed reactive power market is settled on uniform price auction using a modified optimal power flow model uniform prices for various components of reactive power service are obtained for each voltage control area in the study cases described in the paper we examine whether such a localized reactive power market is more desirable than a common system wide reactive power market

reactive power as an ancillary service this paper addresses the problem of reactive power procurement by an independent system operator iso in deregulated electricity markets a reactive bid structure is proposed in the context of a reactive power market based on the reactive power price offers and technical constraints involved in reactive power planning a two tier approach is developed to determine the most beneficial reactive power contracts for the iso the reactive capability of a generator and therefore the opportunity costs in providing reactive power is also included in the model uncertainty in reactive demand and in reactive bids of participating parties is incorporated through monte carlo simulations and the expected reactive power procurement plan for the iso is hence determined the cigre 32 bus network approximately representing the swedish system is used for the studies

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

a new perspective on planned obsolescence automobile manufacturers have long had a policy of introducing annual style changes into their new model cars textbook publishers have a policy of periodically bringing out revised editions of their popular books recently ibm changed the operating system used in its personal computers causing a reduction in the compatibility between its old and new machines if one were to ask the typical man in the street to explain what is happening in these markets he would not hesitate before giving the following answer in economists terminology he would say that for the above firms the incentive to introduce new products that make old units obsolete is too high i e the firms have an incentive to practice planned obsolescence of course just as is true for the man in the street economists have also long observed and commented on the speed with which new products are introduced for example galbraith 1958 suggests that the annual model changes of automobile manufacturers are socially wasteful while fisher griliches and kaysen 1962 provide empirical estimates of the costs of these changes there have also been numerous theoretical attempts to model the idea of planned obsolescence or the related idea of killing off the market for secondhand goods but most of these models have in fact considered the choice a monopolist faces concerning how much durability to build initially into his product rather than the monopolist s incentive to introduce new versions of his product over time 1 in this paper i consider planned obsolescence from the standpoint of a firm that can change the nature of what it sells and show that the man in the street is in fact correct in many settings the incentive for a durable goods monopolist to introduce new products that make old units obsolete will be above that which is socially optimal