Policy Assessment of Market Power for Oligopolistic Power Markets

神奈川県茅ヶ崎市This paper examines the market power of power markets in the electricity liberalization process. For this purpose, I constructed a spatial oligopolistic equilibrium model and estimated the social surpluses and electricity prices at peak, middle and base periods. When comparing the Bertrand equilibrium case with the Cournot equilibrium case, it was estimated that the surpluses of the Cournot case were 14.3% fewer and the peak price was 2.2 times higher than the former. In order to restrain the market power of power markets, I made a policy simulation. Some parts of power plants in a dominant firm were divided and transfered to fringe suppliers. In that situation, the social surpluses of the Cournot case were 7% fewer, and the peak price was 1.4 times higher than the former. These results clarify the constraining effects of market power and would contribute to policy assessment of oligopolistic behavior in the electricity liberalization process