1. 1 David Gachiri Nderitu SUFG, Purdue University nderitu@purdue.edu Quantifying the benefits of distributed generation in imperfectly competitive electricity markets

2. 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. 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. 4 Profit Maximizing Conditions And expanded further into Conjectural variations model

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

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

7. 7 Suppliers in Electricity Market

8. 8 KKT Optimality

9. 9 Complementarity Problem Cournot Assumption

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

11. 11 Demand Response