Monopoly in Electricity Markets Leads to 25% Price Increase, Study Finds
Decentralized electricity markets can be controlled by a few big companies, affecting electricity prices. A study used a simulation called ElecSim to see how this works in the UK in 2018. They made a smart agent to bid in the market using deep reinforcement learning. When a company controls more than 11% of the electricity capacity and bids strategically, prices go up by about 25%. If a company controls over 35% of the capacity, prices shoot up even more. But setting a cap on prices can help keep the market competitive and fair for consumers. This research shows that regulating the market can keep electricity prices in check and benefit both consumers and the economy.