RETRACTED: Forward energy contracts for electricity markets under market power and network uncertainty (Retracted Article)

The restructuring of the electric power industry has involved paradigm makes new structures in power markets. There are two major market structures in Restructured Power Markets. Two-Settlement is a new market structure with two period of competition. The aim of this paper is to examine the extent to which a two-settlement system facilitates forward trading, as well as the welfare and distributional implications of such a system in the presence of network uncertainty and generator market power. The spot market is subject to network uncertainty, which a random capacity congestion of an important transmission line is modeled. Using a duopoly model, we show that even for small probabilities of congestion, forward trading may be substantially reduced, and the market power mitigating effect of forward markets, may be nullified to a great extent.