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 Measuring Welfare in Restructured Electricity Markets written by Erin Mansur and published by . This book was released on 2007 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: Restructuring electricity markets has enabled wholesalers to exercise market power. Using a common method of measuring competitive behavior in these markets, several studies have found substantial inefficiencies. This method overstates actual welfare loss by ignoring production constraints that result in non-convex costs. I develop an alternative method that accounts for these constraints and apply it to the Pennsylvania, New Jersey, and Maryland market. For the summer following restructuring, the common method implies that market imperfections resulted in considerable welfare loss, with actual production costs exceeding the competitive model's estimates by 13 to 21 percent. In contrast, my method finds that actual costs were only between three and eight percent above the competitive levels. In particular, it is the fringe firms whose costs increase, while strategic firms reduce production and costs.
Download or read book Valuation Hedging and Speculation in Competitive Electricity Markets written by Petter L. Skantze and published by Springer Science & Business Media. This book was released on 2001-10-31 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: The challenges facing participants in competitive electricity markets are staggering: high price volatility introduces significant financial risk into an industry accustomed to guaranteed rates of return, while illiquid forward markets prevent effective hedging strategies from being implemented. Valuation, Hedging and Speculation in Competitive Electricity Markets: A Fundamental Approach , examines the unique properties which separate electricity from other traded commodities, including the lack of economical storage, and the impact of a scarce transmission network. The authors trace the sources of uncertainties in the price of electricity to underlying physical and economic processes, and incorporate these into a bid-based model for electricity spot and forward prices. They also illustrate how insufficient market data can be circumvented by using a combination of price and load data in the marking- to-market process. The model is applied to three classes of problems central to the operation of any electric utility or power marketer; valuing generation assets, formulating dynamic hedging strategies for load serving obligations, and pricing transmission contracts and locational spread options. Emphasis is placed on the difference between trades which can be 'booked out' in the forward markets, and those which must be carried through to delivery. Lately, significant attention has been given to the role of regulators in mitigating excessive price levels in electricity markets. The authors conduct a quantitative analysis of the long-term effects of regulatory intervention through the use of price caps. By modeling the dynamic interplay between the observed price levels and the decision to invest in new generation assets, it is shown how such short term fixes can lead to long term deficits in the available generation capacity, and ultimately to market failures and blackouts.
Download or read book Market Power and Market Efficiency written by Celeste Cobb Saravia and published by . This book was released on 2004 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Vertical Integration in Restructured Electricity Markets written by Erin T. Mansur and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Unlike other studies that have found substantial inefficiencies in restructured electricity markets, this paper provides estimates that reveal relatively competitive behavior in the Pennsylvania, New Jersey, and Maryland market. This distinctive conclusion results from using a model that incorporates structural market features and particular production constraints that are not captured in previous studies. First, the vertical integration of firms in the PJM market reduces electricity producers' interest in setting high prices; producers sell wholesale electricity and also are required to buy power, which they provide to their retail customers at set rates. My model reflects this degree of vertical integration of PJM firms. Second, I account for production constraints that result in cost nonconvexities. Measures of price-cost margins based on a commonly used method that does not incorporate these nonconvexities imply that market imperfections during the summer following PJM's restructuring increased procurement costs 51% ($950 million). That method further implies considerable welfare loss as actual production costs exceeded the competitive model's estimates by 12.5%. This paper develops a consistent estimate of competitive production decisions that respect important production constraints, and it presents estimates showing that costs were only 3.4% above competitive levels. Using this new method of estimating production, I compare behavior of two producers that have relatively few retail customers with other firms. Consistent with these vertically integrated firms' incentives, only firms with large net selling positions in the market reduced output relative to competitive production estimates.
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 Lessons from International Experience with Electricity Market Monitoring written by Frank A. Wolak and published by World Bank Publications. This book was released on 2005 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: More than 10 years of experience with the electricity industry restructuring process has shown that market failures are more likely and substantially more harmful to consumers than other market failures because of how electricity is produced and delivered and the crucial role it plays in the modern economy. Wholesale market meltdowns of varying magnitudes and durations have occurred in electricity markets around the world, and many of them could have been prevented if a prospective market monitoring process backed by the prevailing regulatory authority had been in place at the start of the market."
Download or read book Measuring market power in wholesale electricity markets a Dynamic competition approach written by Reynolds and published by . This book was released on with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Restructured Electricity Markets written by United States Government Accountability Office and published by Createspace Independent Publishing Platform. This book was released on 2018-02-05 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Restructured Electricity Markets: California Market Design Enabled Exercise of Market Power
Download or read book Vertical Arrangemens Market Structure and Competition an Analysis of Restructured U S Electricity Markets written by James Bushnell and published by . This book was released on 2007 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Vertical Arrangements Market Structure and Competition written by James Bushnell and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relative importance of horizontal market structure, auction design, and vertical arrangements in explaining electricity prices. We define vertical arrangements as either vertical integration or long term contracts whereby retail prices are determined prior to wholesale prices. This is generally the case in electricity markets. These ex ante retail price commitments mean that a producer has effectively entered into a forward contract when it takes on retail customers. The integrated firm has less incentive to raise wholesale prices when its sale price is constrained. For three restructured wholesale electricity markets, we simulate two sets of prices that define the bounds on static oligopoly equilibria. Our findings suggest that vertical arrangements dramatically affect estimated market outcomes. Simulated prices that assume Cournot behavior but ignore this vertical scope vastly exceed observed prices. After accounting for the arrangements, performance is similar to Cournot in each market. Our results indicate that auction design has done little to limit strategic behavior and that horizontal market structure accurately predicts market performance only when vertical structure is also taken into account.
Download or read book Measuring Market Power in Wholesale Electricity Italian Market written by C. Andrea Bollino and published by . This book was released on 2019 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the new deregulated competitive Italian electricity many interesting issues arise as the market complexity, the firm strategic behavior, the market power size, and so on. Effective competition in the electricity market is a necessary features of a successful supply industry restructuring. In this paper we examine the degree of competition in the Italian market during the period April 2004 to December 2004 in two principal ways. In the first one we estimate a very intuitive relation among the differences between the hourly equilibrium price (ph) and the individual hourly bids that the competitors offer around ph, and a large set of structural and behavioral variables. In the second one the aim is twofold. The first one is to build the residual demand for each Italian Generation Company. The construction of the residual demand curve system is the necessary condition to get the second aim which is to measure the unilateral market power for the Italian Generation Companies. Following Wolak (2003) approach the appropriate measure of the unilateral market power is the Lerner index based on the residual demand curve elasticity which is computed as arc elasticity. The expected results is a deeper understanding of the Wholesale Italian Electricity Markets and of its mechanism in order to enhance competition and to design appropriate market surveillance.
Download or read book Restructured Electricity Markets written by United States. General Accounting Office and published by . This book was released on 2002 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Restructured Electricity Markets written by United States. General Accounting Office and published by . This book was released on 2002 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Horizontal Market Power in Restructured Electricity Markets written by United States. Department of Energy. Office of Economic, Electricity and Natural Gas Analysis and published by . This book was released on 2000 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Measuring the Trilemma in Electricity Markets with Respect to Market Openness in OECD Countries written by Shai Hassid and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The work aims to observe whether OECD countries with more open electricity markets also experience better performing electricity markets. The performance of electricity markets is measured using a composite index which is developed throughout the dissertation and is based on three domains: economic, environmental and supply (the 'trilemma'). The index results show a trade-off between the economic domain, in particular low electricity prices, and the environmental and supply domains in countries with low performing electricity markets. The comparison of the developed index and the OECD index, which measures the openness of electricity markets, yields inconclusive results which suggest a weak link between market openness and performance. On the other hand, the comparison of the electricity performance index with an index that measures quality of institutions shows a more robust link between quality of institutions and electricity market performance, suggesting that quality of institutions play a stronger role in balancing the trilemma than market openness. Furthermore, the openness of electricity market and institutional quality indices together provide more robust results when compared to the electricity markets performance index, implying that institutional quality might be vital for the operation of open electricity markets. The relationship between performance of electricity markets and their openness and institutional quality should be further explored using time series data and a more extensive set of indicators to measure the performance of electricity markets and institutional quality specific to electricity markets.
Download or read book Measuring Market Power and the Efficiency of Alberta s Restructured Electricity Market written by David Brown and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: French Abstract: Mesurer le pouvoir de marché et les inefficacités du marché restructuré pour l'électricité en Alberta: un design de marché pour l'énergie seulement. Les auteurs mesurent le degré de pouvoir de marché effectif en acte et les inefficacités du marché restructuré de l'électricité en Alberta. Utilisant les données par heure sur le marché en gros, on découvre que les firmes exercent un pouvoir de marché substantiel dans les plages horaires de forte demande où il y a excès de capacité de production limité. L'exercice du pouvoir de marché est faible dans les autres plages horaires. Les inefficacités sont plus grandes dans les heures de grande demande et soulèvent les coûts de production de 6,7 % à 19 % au-dessus des coûts concurrentiels de référence - en moyenne de 13 %. Cela se traduit par une augmentation de 2,1% du prix moyen par heure quand c'est reporté sur toutes les heures. Un cadre de réglementation récent a clarifié que certains types d'usage de pouvoir de marché sont permis en Alberta. Les auteurs ont observé que le comportement stratégique a changé après ces clarifications. L'exercice du pouvoir de marché s'est accru. On montre que les revenus observés sont souvent suffisants pour promouvoir l'investissement dans des technologies fondées sur le gaz naturel. Les rentes tirées de l'usage du pouvoir de marché peuvent excéder les coûts estimés pour accroître la capacité dans certaines technologies de génération d'énergie. Cependant, on montre que les profits dans le marché de l'énergie en l'absence de l'usage du pouvoir de marché sont insuffisants pour promouvoir l'investissement dans le développement de capacité de génération additionnelle. Cela souligne l'importance de considérer à la fois les mesures à court et à long terme de la performance du marché pour l'électricité
