Date: 2014
Type: Article
Market design and supply security in imperfect power markets
Energy economics, 2014, Vol. 43, pp. 256-263[Florence School of Regulation], [Electricity]
SCHWENEN, Sebastian, Market design and supply security in imperfect power markets, Energy economics, 2014, Vol. 43, pp. 256-263[Florence School of Regulation], [Electricity] - https://hdl.handle.net/1814/39487
Retrieved from Cadmus, EUI Research Repository
Supply security in imperfect power markets is modelled under different market designs. In a uniform price auction for electricity with two firms, strategic behaviour may leave firms offering too few capacities and unable to supply all realized demand. Market design that relies on capacity markets increases available generation capacities for sufficiently high capacity prices and consequently decreases energy prices. However, equilibrium capacity prices are non-competitive. Capacity markets can increase security of supply, but cannot mitigate market power, which is exercised in the capacity market instead of the energy market.
Cadmus permanent link: https://hdl.handle.net/1814/39487
Full-text via DOI: 10.1016/j.eneco.2014.02.012
ISSN: 0140-9883
Series/Number: [Florence School of Regulation]; [Electricity]
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