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Analysis of long‐term profitability and DSM needs of utilities in a partially liberalized retail market by a generation system expansion model
Author(s) -
Takahashi Masahito,
Asano Hiroshi
Publication year - 2003
Publication title -
electrical engineering in japan
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.136
H-Index - 28
eISSN - 1520-6416
pISSN - 0424-7760
DOI - 10.1002/eej.10111
Subject(s) - profitability index , profit (economics) , competition (biology) , liberalization , industrial organization , electricity market , business , electricity , term (time) , demand response , investment (military) , microeconomics , economics , market economy , finance , engineering , ecology , physics , quantum mechanics , politics , political science , law , electrical engineering , biology
Retail competition in the electric power market was introduced in Japan in March 2000. Although the liberalization is limited to a part of the retail power market having about 30% of the total electricity demand, the liberalized customer segment is now subject to competition among the utilities and new entrants. This paper examines the profitability of competitive pricing for eligible segmented customers through a scenario‐based model analysis focusing on the demand characteristics of segmented customers. The model includes the utility's investment in power generation for segmented customers, considering long‐term rather than short‐term profitability. Load leveling is not always achieved under profit‐maximizing behavior of the utility because the profitability of competitive pricing depends on load patterns of bypassed customers and price differentials among power suppliers. © 2003 Wiley Periodicals, Inc. Electr Eng Jpn, 144(4): 43–52, 2003; Published online in Wiley InterScience ( www.interscience.wiley.com ). DOI 10.1002/eej.10111