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Market power abuse in wholesale electricity markets
Alice Lixuan Xu, Jorge S\'anchez Canales, Chiara Fusar Bassini, Lynn H. Kaack, Lion Hirth
https://arxiv.org/abs/2506.03808 …

Market power abuse in wholesale electricity markets
In wholesale electricity markets, prices fluctuate widely from hour to hour and electricity generators price-hedge their output using longer-term contracts, such as monthly base futures. Consequently, the incentives they face to drive up the power prices by reducing supply has a high hourly specificity, and because of hedging, they regularly also face an incentive to depress prices by inflating supply. In this study, we explain the dynamics between hedging and market power abuse in wholesale el…