Download or read book Essays on Empirical Analysis of Multi unit Auctions Impacts of Financial Transmission Rights on the Restructured Electricity Industry written by Hailing Zang and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation uses recently developed empirical methodologies for the study of multi-unit auctions to test the impacts of Financial Transmission Rights (FTRs) on the competitiveness of restructured electricity markets. FTRs are a special type of financial option that hedge against volatility in the cost of transporting electricity over the grid. Policy makers seek to use the prices of FTRs as market signals to incentivize efficient investment and utilization of transmission capacity. However, prices will not send the correct signals if market participants strategically use FTRs. This dissertation uses data from the Texas electricity market to test whether the prices of FTRs are efficient to achieve such goals. The auctions studied are multiunit, uniform-price, sealed-bid auctions. The first part of the dissertation studies the auctions on the spot market of the wholesale electricity industry. I derive structural empirical models to test theoretical predictions as to whether bidders fully internalize the effect of FTRs on profits into their bidding decisions. I find that bidders are learning as to how to optimally bid above marginal cost for their inframarginal capacities. The bidders also learn to bid to include FTRs into their profit maximization problem during the course of the first year. But starting from the second year, they deviated from optimal bidding that includes FTRs in the profit maximization problems. Counterfactual analysis show that the primary effect of FTRs on market outcomes is changing the level of prices rather than production efficiency. Finally, I find that in most months, the current allocations of FTRs are statistically equivalent to the optimal allocations. The second part of the dissertation studies the bidding behavior in the FTR auctions. I find that FTRs' strategic impact on the FTR purchasing behavior is significant for large bidders - firms exercising market power in the FTR auctions. Second, trader forecasts future FTR credit very accurately while large generators' forecasts of future FTR credit tends to be biased upward. Finally, The bid shading patterns are consistent with theoretical predictions and support the existence of common values.

Download or read book Financial Transmission Rights written by Juan Rosellón and published by Springer Science & Business Media. This book was released on 2013-03-15 with total page 442 pages. Available in PDF, EPUB and Kindle. Book excerpt: Whilst financial rights have appeared as a successful ingredient in North-American power markets, they have their shortcomings both theoretically and in practice. Financial Transmission Rights: Analysis, Experiences and Prospects present a systematic and comprehensive overview of financial transmission rights (FTRS). Following a general introduction to FTRs, including chapters to explain transmission pricing and the general properties of FTRS, experts in the field provide discussions on wide scope of topics. These include: Varying perspectives on FTRS: from electrical engineers to economists, Different mathematical formulations of FTRS Financial Hedging using FTRS, and Alternative solutions to FTRs The detail, expertise and range of content makes Financial Transmission Rights: Analysis, Experiences and Prospect an essential resource for electricity market specialists both at academic and professional levels. “This is THE BOOK we were all expecting to address all key ‘Financial Transmission Rights’ issues. It is comprehensive and reader friendly. You can pick at will in its menu: more or less theory, a bit of maths or none, empirical review of real cases or numerical simulations of many feasible options. Big names rally there to delight you like: Hogan , Oren, Perez-Arriaga, Smeers, Hobbs and... Rosellón. More than a must read: a light house, a map and a survival kit.” Jean – Michel Glachant, Director Florence School, Holder Loyola de Palacio Chair, Chief-editor Economics of Energy & Environmental Policy. "In the last two decades, economists have developed a better understanding of the impact of financial rights on risk management, market power and network expansion in electricity markets, while power systems have experimented with such rights. Striking a good balance between academics and practitioners, always at the frontier of the field, written by the best experts, this volume is essential reading for all those- power systems’ managers and users, regulators, students and researchers- who want to understand the new electricity environment and predict its evolution." Jean Tirole, Toulouse School of Economics and Institute for Industrial Economics (IDEI) Further comments inside.

Download or read book Journal of Economic Literature written by and published by . This book was released on 2006-12 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on making Electric Power Markets written by Brian Thomas Kench and published by . This book was released on 2000 with total page 434 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Alternative Models to Analyze Market Power and Financial Transmission Rights in Electricity Markets electronic Resource written by Bautista Alderete, Guillermo and published by University of Waterloo. This book was released on 2005 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the main concerns with the introduction of competition in the power sector is the strategic behaviour of market participants. Computable models of strategic behaviour are becoming increasingly important to understand the complexities of competition. Such models can help analyze market designs and regulatory policies. In this thesis, further developments on the modelling and analysis of strategic behaviour in electricity markets are presented. This thesis work has been conducted along three research lines. In the first research line, an oligopolistic model of a joint energy and spinning reserve market is formulated to analyze imperfect competition. Strategic behaviour is introduced by means of conjectured functions. With this integrated formulation for imperfect competition, the opportunity cost between generation and spinning reserve has been analytically derived. Besides, inter-temporal and energy constraints, and financial transmission rights are taken into account. Under such considerations, competition in electricity markets is modelled with more realism. The oligopolistic model is formulated as an equilibrium problem in terms of complementarity conditions. In the second research line, a methodology to screen and mitigate the potential exacerbation of market power due to the ownership of financial transmission rights is presented. Hedging position ratios are computed to quantify the hedging level of financial transmission rights. They are based on the actual impact that each participant has in the energy market, and on the potential impact that it would have with the ownership of financial transmission rights. Thus, hedging position ratios are used to identify the potential gambling positions from the transmission rights bidders, and, therefore, used to prioritize critical positions in the auction for transmission rights. In the last research line, alternative equilibrium models of markets for financial transmission rights are formulated. The proposed equilibrium framework is more natural and flexible for modelling markets than the classic cost-minimization markets. Different markets for financial transmission rights are modelled, namely: i) forwards, ii) options, and iii) joint forwards and options. Moreover, one-period, multi-period and multi-round markets for forwards are derived. These equilibrium models are proposed to analyze the bidding strategies of market participants. The potential impact of bidders on congestion prices is modelled by means of conjectured transmission price functions.

Download or read book Competitive Electricity Markets written by Fereidoon Sioshansi and published by Elsevier. This book was released on 2011-10-10 with total page 625 pages. Available in PDF, EPUB and Kindle. Book excerpt: After 2 decades, policymakers and regulators agree that electricity market reform, liberalization and privatization remains partly art. Moreover, the international experience suggests that in nearly all cases, initial market reform leads to unintended consequences or introduces new risks, which must be addressed in subsequent “reform of the reforms. Competitive Electricity Markets describes the evolution of the market reform process including a number of challenging issues such as infrastructure investment, resource adequacy, capacity and demand participation, market power, distributed generation, renewable energy and global climate change. Sequel to Electricity Market Reform: An International Perspective in the same series published in 2006 Contributions from renowned scholars and practitioners on significant electricity market design and implementation issues Covers timely topics on the evolution of electricity market liberalization worldwide

Download or read book An Empirical Analysis of a Dominant Firm s Market Power in a Restructured Electricity Market A Case Study of Colorado written by and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study analyzes the horizontal market power of a dominant generation firm in a restructured electricity market. Electric restructuring is a form of deregulation where competition occurs in the generation of electricity. Horizontal market power is the ability of a firm to profitably set market price above marginal cost due to the firm's ownership of a large share of the available generation. In the U.S., there are 32 states where one firm owns at least 40% of the existing generation. As these states consider electric restructuring, analysis of the market power that a dominant firm can exercise could become increasingly important. This type of analysis has been largely ignored in published economic analyses of electric restructuring. Many of the factors that determine a firm's ability to exercise market power, such as the number and capacity of transmission paths, the number of firms, and the shape of the load curve, are specific to a particular area. Colorado serves as a case study for this analysis. The approach implemented here is to compute a competitive market equilibrium using a simulation model, and then apply a dominant firm's markup when the supply of the competitive fringe is constrained. The model shows that the incumbent regulated monopoly, Public Service Company of Colorado (PSCo), has the potential to set prices above marginal cost much of the year. The price elasticity of demand, which varies by customer class, also greatly affects the amount of markup PSCo could apply. The study investigates. three scenarios under which PSCo's market power might be mitigated. Relaxing transmission constraints within the Rocky Mountain Power Area has almost no effect on PSCo's market power. Entry by 1,000 MW of fringe generation reduces the amount of the year over which a markup could be applied from the base case estimate of 93% to 72%. If PSCo agrees to divest 50% of its generation, markups can be applied only 37% of the year.

Download or read book The Regulation of Power Exchanges in Europe written by Martha M. Roggenkamp and published by Intersentia nv. This book was released on 2005 with total page 338 pages. Available in PDF, EPUB and Kindle. Book excerpt: The liberalisation of the electricity sector has changed the way in which electricity is traded. De facto or legal vertical monopolies are gradually abandoned and new participants have entered the market. At the wholesale level, one of the important developments is the establishment of organised electricity markets, i.e. electricity power exchanges. This book analyses the role and evaluates the impact of these new organised markets, which until now received little attention. The introduction provides an overview of the developments on EC level as this creates the legal environment within which power exchanges operate. The implementation of the EC Electricity Directive has inter alia resulted in a commodization of electricity trading. Thereupon the development of power pools and electricity exchanges is discussed as well as the products which can be traded. Subsequently, the development of the most important national and/or regional exchanges in Europe will be examined. National experts will analyse the role of power exchanges in the Nordic countries, the United Kingdom, the Netherlands, Germany, France, Austria, Spain and Italy. The authors analyse the most important developments in their jurisdictions according to a fixed outline (e.g. implementation of the EC Electricity Directive, market structure, emergence and functioning of the organised market, products traded and the impact of cross-border trade) which allows for a comparative analysis and facilitates understanding. Finally, some conclusions with regard to the establishment of a single electricity market will be presented as well as some future developments.

Download or read book Multi dimensional Risk and Investment Return in the Energy Sector written by Peter Rabensteiner and published by Haupt Verlag AG. This book was released on 2013 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: Die vorliegende Dissertation untersucht die kapitalbezogenen Aspekte von Investitionen im regulierten Energiesektor, wobei der Fokus auf dem elektrischen Übertragungsnetz liegt. Eine grundlegende Prämisse ist hierbei die "Endogenität des Risikos," wonach das Risikoprofil einer regulierten Investition von den Spezifikationen des regulatorischen Marktdesigns abhängt, durch welches stochastische Kosten und Einnahmen unter den beteiligten Stakeholdern - den Investoren, Konsumenten und Steuerzahlern - aufgeteilt werden. Das übergreifende Konzept ist ein multidimensionales regulatorisches Risiko-Framework, welches eine systematische Beurteilung des Einflusses von stochastischen Risiken auf den Marktwert und Cashflow von regulierten Unternehmen ermöglicht. Gemäss den Dimensionen des Risiko-Frameworks werden die einzelnen Risiken nach ihren systematischen und symmetrischen Eigenschaften sowie nach deren finanziellen Auswirkungen auf das regulierte Unternehmen charakterisiert. Auf Grundlage der konzeptionellen Aufarbeitung und einer umfassenden bibliografischen Übersicht über die vorhandene wissenschaftliche Literatur werden neue Forschungsansätze entwickelt, welche sich mit den identifizierten analytischen und empirischen Forschungslücken befassen: Erstens erlaubt eine kapitalmarktbasierte Kennzahl für das implizierte systematische Risiko, welches auf Basis fundamentaler Bewertungsmodelle und Marktpreise errechnet werden kann, eine robuste Schätzung der Kapitalkosten von börsennotierten Übertragungsfirmen. Eine auf diesem Ansatz beruhende Anpassung der erlaubten Rendite könnte ein wertvolles selbstkorrigierendes Instrumentarium für Regulatoren darstellen. Zweitens ergibt die Analyse einer hypothetischen grenzüberschreitenden Übertragungsleitung zwischen Polen und Österreich, welche aufgrund stündlicher Spotpreise an den jeweiligen Strombörsen durchgeführt wurde, eine Schätzung des systematischen Risikos nahe Nul.

Download or read book Electricity Auctions written by Luiz Maurer and published by World Bank Publications. This book was released on 2011-07-25 with total page 181 pages. Available in PDF, EPUB and Kindle. Book excerpt: Electricity-contract auctions have been getting increased attention as they have emerged as a successful mechanism to procure new generation capacity and. This book presents a comprehensive overview of international experiences in auction design and implementation.

Download or read book Essays on Electricity Transmission Investment and Financial Transmission Rights written by Wenzhuo Shang and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Measuring Market Performance in Restructured Electricity Markets written by Russell Jay Tucker and published by . This book was released on 2003 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book An Empirical Analysis of a Dominant Firm s Market Power in a Restructured Electricity Market written by Al Sweetser and published by . This book was released on 1998 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Designing Competitive Electricity Markets written by Hung-po Chao and published by Springer. This book was released on 1998-09-30 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume contains papers that were discussed at the fust workshop on Markets for Electricity: Economics and Technology (MEET) held at Stanford University on March 7-8, 1997. The workshop's focus was how to design competitive electricity markets in an industry undergoing rapid changes in both economics and technology. We are very appreciative of the generous funding support provided by Dr. Gail McCarthy, Director of Strategic Science and Technology at Electric Power Research Institute. We would like to acknowledge all the workshop participants, including Paul Joskow, Martin Baughman, William Hogan, Robert Wilson, Granger Morgan, Paul Kleindorfer, Shmuel Oren, Edward Kahn, Stephen Rassenti, Stephen Stofl:, Stephen Peck, Victor Niemeyer, Jeremy Bloom, Martin Weinberger and Al Pak, for their significant contributions in discussing these issues at that workshop. CONTRIBUTING AUTHORS Martin L. Baughman is Professor of Electrical and Computer Engineering, University of Texas at Austin. Hung-po Chao is Area Manager of Policy and Risk Analysis, Electric Power Research Institute, Palo Alto, California, and Consulting Professor with Department of Engineering-Economic Systems and Operations Research, Stanford University. William W. Hogan is Lucius N. Littauer Professor of Public Policy and Administration, John F. Keunedy School of Government, Harvard University, Cambridge, Massachusetts and Senior Advisor, Putnam, Hayes & Bartlett, Inc., Cambridge, Massachusetts. Hillard G. Huntington is Executive Director, Energy Modeling Forum, Stanford University, Stanford, California. Paul L. Joskow is Elizabeth and JamesKillian Professor of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts. Edward P. Kahn is Vice President, National Economic Research Associates, San Francisco, Califonria.

Download or read book An Empirical Analysis of Privatization and Restructuring in the British Electricity Industry written by Catherine Dana Wolfram and published by . This book was released on 1996 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Network and Temporal Effects on Strategic Bidding in Electricity Markets written by Youfei Liu and published by Open Dissertation Press. This book was released on 2017-01-27 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Network and Temporal Effects on Strategic Bidding in Electricity Markets" by Youfei, Liu, 劉有飛, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: of thesis entitled "Network And Temporal Effects On Strategic Bidding In Electricity Markets" Submitted by Youfei Liu for the Degree of Doctor of Philosophy at the University of Hong Kong in February 2006 The global deregulation of power industries has given rise to many fascinating research topics. This thesis addresses issues of strategic bidding by power generators. The problem of strategic bidding is to optimize an individual power generation bid by maximizing profits, based on production cost, expectation of rival behavior and system demand. Electrical power flow over different links is governed by the physical law (Kirchhoff law). As a result, electrical power flow cannot be independently determined and the electricity transmission system has global network effects. One major contribution of this study is to investigate the network effects of electricity transmission on strategic bidding and analyze the network-constrained electricity market equilibria. A three-node electricity system is used for investigation. The decision space of generators is divided into the congestion-on region and congestion-off region, and the optimal response curves of generators in each region are then derived. The market equilibrium is located as the intersection of these optimal response curves. It is analytically shown that this may consist either of a unique unconstrained market equilibrium, a unique constrained market equilibrium, multiple-equilibria, or no pure Nash equilibrium. Subsequently, the interaction between transmission rights holding and market power exercising is addressed. It is shown that in the situation with a positive PTDF, holding transmission rights mitigate market power, and produce an improvement in market efficiency, while in other situations, the reverse is true. Furthermore it is demonstrated that a possible allocation of transmission rights to generators can be found to achieve maximum efficiency. Another unique characteristic of electricity markets is their notable temporal ii effects. In other words, electricity prices have significant volatilities because of the non-storability of power energy and the large variations of system demand. The second part of this study investigates the temporal effects of the electricity market on strategic bidding. A periodic dynamic feedback system is proposed to model the generation competition process. With the developed system dynamics, an optimal control problem is formulated to study the multi-period optimization behavior (called the 'advanced' strategy) of a generator, and the state-feedback control rule is then derived via a sweeping method. It is demonstrated that the generator with optimal control can obtain more profits, and a sensitivity analysis is provided to locate the market factors that affect the performance of optimal control. Next, system uncertainties are included, and a stochastic optimal control problem for generation decision is formulated and solved. Two interesting problems are investigated, namely the effect of the generator's 'advanced' strategic behavior on market efficiency, and the way in which an individual's payoff evolves with other generators' 'advanced' strategic behavior. It is shown that the 'advanced' strategic behavior of generators will improve market efficiency, while an individual's payoff evolution resembles a 'Prisoner Dilemma'. An analysis of risk management of generation decisi...

Download or read book Testing Financial and Real Market Operations in Restructured Electricity Systems written by Junjie Sun and published by . This book was released on 2006 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: