Study on economic withholding in electricity market of Zhejiang Province, China

Power suppliers with market power intend to bid high-price to obtain excessive profit when intensions in the balance of electricity supply and demand emerge. New index is thus necessary to be defined to assess the economic withholding behavior associated with both bidding prices and corresponding bidding capacity. Stages of low price section, economic withholding section and reasonable adventure section were classified in this paper. Based on bidding prices and capacity, absolute index and relative index were proposed to measure the economic withholding degree, with the former used for estimation of the total power system while the latter for comparisons amongst different units. A case study on Zhejiang electricity market indicated that these two proposed indices can accurately assess the economic withholding behavior in the electricity market. Finally, upper limit was suggested to be set for the relative index to suppress the behavior of excessive bidding prices in short of capacity.