An Oligopoly Simulation of a Restructured ERCOT: Will Future Prices Be Competitive?

Restructured energy markets present opportunities for the exercise of market power. It is instructive to simulate the restructured ERCOT market as a non-collusive oligopoly, comparing price and profits of the participants assuming that the three largest incumbents behave competitively to the case where they behave as non-collusive oligopolists, and taking into account proposed new generation and new market entrants.