Computing Two-settlement Equilibrium in a Transmission-Constrained Oligopolistic Electricity Market

The two settlement equilibrium model described in this panel aims at providing a simulation tool that can capture the interaction between the forward and spot electricity markets in a realistic selling. This model can be used to explore the classic economic question posed by Allaz in a more realistic selling and analyze horizontal market power issues under varying assumptions regarding ownership structure and network effects. This model can also be used in evaluating the impact of transmission upgrades, for instance, while taking into consideration forward contracting and market power effects