1 David Gachiri Nderitu SUFG, Purdue University Quantifying the benefits of distributed generation in imperfectly competitive electricity.

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Presentation transcript:

1 David Gachiri Nderitu SUFG, Purdue University Quantifying the benefits of distributed generation in imperfectly competitive electricity markets

2 In this Presentation DG has a lot of benefits Market power mitigation Reliability Security Especially when in oligopolistic markets Average cost models hide their value Spatial oligopoly model for Midwest

3 Statement of Imperfect Competition Each firms decision variable is to maximize its profit Given a a market price And the firms total cost function

4 Profit Maximizing Conditions And expanded further into Conjectural variations model

5 Alternative Assumptions/Models Cournot Cartel Price leadership MR L = MC L on residual demand Quasi-competitive

6 Relative Prices Marginal Cost Marginal Revenue Quantity Price Cartel Bertland Cournot Cartel Cournot Bertland Demand curve

7 Suppliers in Electricity Market

8 KKT Optimality

9 Complementarity Problem Cournot Assumption

10 Case Study PJM AE MAPPCILCCEIPAMRN SPIL EEI SIPCSIGECOBRECTVALG&EEKPCHERECIPLPSINIPSCOCPCDECO FE AEPOVECVPDPLCG&EDLCOAPS OHY SPP AW

11 Demand Response

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