Nodal Market Power Detection under Locational Marginal Pricing

This paper proposes an index for nodal market power detection in power marketunder locational marginal pricing (lmp). this index is an ex-ante technique to detect themarket power. more precisely, this criterion detects the potential of exercising marketpower regardless of detecting the actual market power. also it is obvious that pricing andmarket clearing method affect the potential of exercising market power. different potentialof market power exists in different pricing methods. this index has been analyzed underlmp method which seems to be a desirable environment to exercise market power. in lmpmethod by load growth, in some determined load levels which is called critical loadlevels (clls), locational marginal prices have step change. this step change in locationalmarginal prices causes step change in revenue and benefit of gencos. so it is significant todetect the behavior of gencos in the clls. the proposed criterion has been tested onconstant system load and clls for two test system.