K. Seeley et al., Analysis of electricity market rules and their effects on strategic behavior in a noncongestive grid, IEEE POW SY, 15(1), 2000, pp. 157-162
Earlier work has discussed the potential for strategic bidding in deregulat
ed electricity markets, and shown specifically how generators can take adva
ntage of congestion in their strategy. We show that it is also possible for
even mid-price suppliers to create congestion problems through gaming in a
noncongestive system. Under auction mechanisms such as in the United Kingd
om, this can be profitable, at the consumer's expense,The optimal auction p
revents profitable gaming, but requires the simultaneous handling of market
clearing and system dispatch, making it harder to ensure the neutrality of
system operations.