Academic literature on the topic 'Strategic capacity withholding'

Microgrids have the potential to provide security and flexibility to power systems through the integration of a wide range of resources, including distributed energy storage, usually in the form of batteries. An aggregation of microgrids can enable the participation of these resources in the main system’s energy and ancillary services market. The traditional minimum-cost operation, however, can undermine microgrid’s ability to hold reserve capacity for operation in islanded mode and can rapidly degrade distributed batteries. This paper studies the impacts of various operational strategies from distributed energy storage plants on their revenues and on market prices, considering an array of microgrids that act in a synchronized fashion. The operational model minimizes the entire electric power system cost, considering transmission-connected and distributed energy resources, and capturing capacity degradation of batteries as part of the cost function. Additionally, microgrid-based, distributed batteries can provide energy arbitrage and both system-level and microgrid-level security services. Through several case studies, we demonstrate the economic impacts of distributed energy storage providing these services, including also capacity degradation. We also demonstrate the benefits of providing reserve services in terms of extra revenue and battery lifespan. Finally, we conclude that limitations in the provision of system-level services from distributed batteries due to degradation considerations and higher microgrid-level security requirements may, counterintuitively, increase system-level revenues for storage owners, if such degradation considerations and microgrid-level security requirements are adopted, at once, by a large number of microgrids, leading to unintended, non-strategic capacity withholding by distributed storage owners.

Licensed warehousing activities in the agricultural sector started with the Agricultural Products Licensed Warehousing Law No. 5300, which was enacted in 2005. It was opened with the support of the state, was developed with the published regulations and started to work under the leadership of the state. The importance of licensed warehouses has increased with the sustainable agriculture approach, which is among Turkey's 2023 Strategic Goals. In Turkey, their number has been increasing in recent years and the licensed warehousing system is of great importance in terms of agricultural products. In this study, the theoretical dimension of the licensed warehousing system and the producers delivering cereals to LİDAŞ operating in Kırşehir Mucur district were evaluated. The sample of the research consists of 70 producers who deliver products to LİDAŞ in the region. When the results obtained are examined, 61.40% of the producers cannot store, 45.70% keep their products at LİDAŞ for an average of 1-3 months, the most important support tool is withholding tax, 80.00% is pricing. It has been determined that LİDAŞ does not have any influence on the cereal planting decision of 60.00%. In addition, other problems of the producers, procedural problems, analysis fees, loading and unloading fees, warehouse rental fees and withholding costs create a negative situation for the producer. The real decline in the amount of support comes to the fore as negative thoughts about working personnel, low capacity in storage facilities and narrow product range to be stored. It can be said that the tendency towards licensed warehousing activities will increase with the solution of these problems.

In this paper, we examine double price cap electricity market from the viewpoint of non-pivotal firms. Collusive scarcity is developed by abolishing the widespread assumption that non-pivotal firms have not enjoyed a strategic behaviour of capacity withholding. In the context of the infinitely repeated game paradigm, the firms are presented with reinforcement learning and punishment policy framework, in that they attempt to learn how to tune the slope of bidding decisions and when to declare a collusive fictitious binding capacity constraint. The resulting bidding decisions explain the rationale of collusion behind capacity withholding and show to what extent non-pivotal firms can maintain stable collusive outcomes with punishment policy framework. A simulation using the generation portfolio of the Iranian electricity industry sheds light on why non-pivotal firms are capable of capacity withholding and how they maintain their collusive behaviour by exerting punishment policy.

The thesis is a collection of three empirical essays focussing on the Italian electricity market. The first chapter, titled “Assessing market power in the Italian electricity market: a synthetic supply approach”, is a joint work with Prof. Luigi Grossi and Prof. Michael. G. Pollitt and was published among the Energy Policy Research Group Working Papers (no. 1930). This chapter investigates the bidding behaviour of the leading firms in the Italian electricity market, in particular on the Italian day-ahead market. The methodology adopted is synthetic supply, proposed by Ciarreta et al (2010), which consists in a two-step procedure, i.e. 1) power plants association and 2) hourly bidding schedule “translation”. Thanks to synthetic supply it is possible to create hourly counterfactual supply curves and see if there are differences between actual and synthetic equilibria. In other words, the idea is to investigate the difference in mark-up between the bidding schedules of power plants with very similar features. For this reason, power plants were associated with very strict criteria: technology, energy efficiency and many others. Furthermore, an algorithm in R was developed to compute hourly equilibria in the day-ahead market. This way, it is possible to assess if there are any differences between the bidding behaviour of the leading operators and the bidding behaviour of smaller generators. The findings suggest that during the years under examination (2015-2018), the market underwent higher prices and a non-negligible consumer surplus loss, especially during the months when above average heating and cooling were required. The second chapter, titled “Detecting strategic capacity withholding through a synthetic supply approach - Cui Prodest?”, puts forward a new methodology in the field of market monitoring. The methodology of synthetic supply and the R code are employed. However, the way synthetic supply is used in this chapter is completely new. A four-step procedure is proposed to investigate strategic capacity withholding, i.e. 1) hourly supply curves are created and extra capacity is artificially added to the supply schedule, 2) synthetic and actual prices are compared and anomalous price spikes detected, 3) synthetic and actual revenues are compared, to see if any market operator could have obtained more revenues from a scenario where some capacity was withheld, 4) the SSCW index is proposed to better interpret the results. The chapter carries out an empirical analysis of the Italian day-ahead market in 2018. This approach is a significant contribution to the literature because it enables the analysis of manipulative behaviour with a different perspective compared to the methodology currently available. The third chapter, titled “Covid-19 and the Italian electricity market: impacts, developments and implications”, investigates the effects of the restrictive measures employed by the Italian Government in response to Covid-19 on the Italian electricity market. This chapter presents a data description of the main market variables of the electricity market and uses an econometric model to estimate the effects of geographical and production lockdowns on the zonal quantities purchased and on the PUN (nationwide unit price). Data suggests that both quantity purchased, and prices were affected by the lockdowns, especially in the bidding areas of Northern Italy. The bidding zones of Southern Italy seem to be considerably less affected by restrictive measures. This is also confirmed by the econometric model. In addition, fall in demand led to a smaller quantity purchased, compared to the corresponding weeks in previous years, leading to substantial changes in the mix of energy sources. This chapter proposes a complete description of the evolution of the electricity market during the pandemic and provides useful policy recommendations on how financial resources should be allocated to relieve the Italian economy.

Although the benefits of standard dialysis therapy for many older adults with complex comorbid conditions is equivocal, there continues to be substantial moral uncertainty in the practice of withholding and withdrawing dialysis treatment. This chapter reviews several ethical conundrums in palliative care of patients with advanced kidney disease, including uncertainty about the moral status of withholding dialysis and pursuing medical management without dialysis, challenges in decision-making when patients lack capacity to participate, and ethically relevant social and cultural factors influencing practice. Better understanding of the underlying causes of these conundrums reveals opportunities to improve quality of patient care at the individual and system levels by incorporating palliative practices. The chapter also suggests strategies for clinicians to identify and facilitate resolution of ethical conflicts around end-of-life care for patients with advanced kidney disease in clinical practice.