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This paper investigates the issues of reactive power must-run capacity in power system operations, hence in electricity markets. A must-run index-based method is proposed in the paper to measure the market power held by reactive power suppliers. The Nordic 32-bus system and the IEEE 118-bus system are used to test the proposed method. The market power holders of reactive power found using the proposed method are in accord with that found in the realistic Nordic system operation and in the existing analysis of IEEE 118-bus system. The paper identifies through must-run indices possible conditions that could lead to market power in the case of applying a bid structure within a market framework. Furthermore, market structure drawbacks can cause the appearance of market power even in a topologically ideal system. [ABSTRACT FROM AUTHOR]

-A power supplier in a pool-based market needs to allocate his generation capacities to participate in contract and spot markets. In this paper, the optimal portfolio selection theory is introduced for this purpose. A model applying this theory is proposed to solve the supplier asset allocation problem. Real market data are used in a numerical study to test the proposed model. The results show that different asset allocation solutions can yield very different risk-return tradeoffs for a supplier, and the proposed method can be potentially useful in suppliers' decision making. [ABSTRACT FROM AUTHOR]