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Erschienen in:
Models of Strategic Bidding in Electricity Markets Under Network Constraints Kapitel lesen Erstes Kapitel lesen

2012 | OriginalPaper | Buchkapitel

Equilibrium Predictions in Wholesale Electricity Markets

verfasst von : Talat S. Genc

Erschienen in: Handbook of Networks in Power Systems I

Verlag: Springer Berlin Heidelberg

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Abstract

We review supply function equilibrium models and their predictions on market outcomes in the wholesale electricity auctions. We discuss how observable market characteristics such as capacity constraints, number of power suppliers, load distribution and auction format affect the behavior of suppliers and performance of the market. We specifically focus on the possible market power exerted by pivotal suppliers and the comparison between discriminatory and uniform-price auctions. We also describe capacity investment behavior of electricity producers in the restructured industry.

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Vorheriges Kapitel Compromise Scheduling of Bilateral Contracts in Electricity Market Environment
Nächstes Kapitel The Economic Impact of Demand-Response Programs on Power Systems. A Survey of the State of the Art
Fußnoten
1
It should be noted that their theoretical conclusions are based on a very simple model with only two possible bids, and symmetric costs and capacities.
 
2
In the sale auctions, winner’s curse refers to winner’s overpayment for a product in the common value with incomplete information auction. In electricity context, which is a common value procurement auction, winner’s curse occurs, whether it is a uniform-price or a discriminatory auction, when generators offer low prices for their production units. However, to avoid the curse, savvy generators may tend to overbid in the repeated electricity auctions.
 
3
Infra-marginal capacity is the production capacity that is less than the market clearing quantity supplied; whereas marginal capacity is the quantity that helps clear the market. Infra-marginal plants generally supply base-load capacity and marginal plants like thermal generators (petroleum-fired generators) clear the market at higher prices. In the uniform-price auction both infra-marginal and marginal plants are paid at the market clearing price. In the discriminatory auction, they are paid at their own bid prices.
 
4
Both Markov perfect equilibrium and (S-adapted) open-loop equilibrium are Nash equilibrium in production and investment strategies. Markov perfect strategies are state-dependent, whereas open-loop strategies are mainly conditioned on calendar-time and the decisions are made at the outset of the game. In a stochastic game, the appropriate equilibrium concept with the features of open-loop information is S-adapted open-loop equilibrium. The key difference between the open-loop equilibrium and S-adapted open-loop equilibrium is that S-adapted equilibrium strategies in open-loop equilibrium allow the decisions to be adapted to the demand shock realization.
 
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Metadaten
Titel
Equilibrium Predictions in Wholesale Electricity Markets
verfasst von
Talat S. Genc
Copyright-Jahr
2012
Verlag
Springer Berlin Heidelberg
Buch
Handbook of Networks in Power Systems I

Print ISBN: 978-3-642-23192-6

Electronic ISBN: 978-3-642-23193-3

Copyright-Jahr: 2012

DOI
https://doi.org/10.1007/978-3-642-23193-3_10