Abstract

Understanding market participants' competitive behaviour is essential for optimising financial performance in liberalised electricity markets. However, this is challenging due to complex market structures, generation dependent on different primary energy sources and lack of transparency. This paper introduces a novel approach using power spectrum analysis applied to wholesale electricity markets to uncover hidden patterns. Applying this novel method to the Western Australian Wholesale Electricity Market (WEM) revealed periodic cycles in different fuel types and technologies that offered insights into competitor behaviour not immediately evident in the dataset. Surprisingly, the approach uncovered that in a power system with high penetration of renewable generation, there is a weak price response to demand changes, challenging assumptions about the direct link between demand and price formation. These insights could be applied gain a competitive edge in capital investment decisions and tactical bidding behaviour.

RAS ID

64742

Document Type

Journal Article

Date of Publication

10-1-2023

Volume

36

Issue

8

School

School of Engineering

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Publisher

Elsevier

Comments

Maticka, M. J., & Mahmoud, T. S. (2023). Unlocking market secrets: Revealing wholesale electricity market price dynamics with a novel application of spectrum analysis. The Electricity Journal, 36(8), article 107330. https://doi.org/10.1016/j.tej.2023.107330

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Link to publisher version (DOI)

10.1016/j.tej.2023.107330