Transmission rights and generator's strategic bidding in electricity markets

In this paper, the interaction between generator's strategic bidding and transmission rights holding is explored. It is shown that holding transmission rights further reconfigures generator's strategic behavior and thus influence market equilibrium. It is then demonstrated that holding transmission rights may mitigate generator's market power in some situation (with a positive PTDF), whilst exacerbate market power in another situation (with a negative PTDF).