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HICSS
2005
IEEE

Cournot Equilibrium in Price-Capped Two-Settlement Electricity Markets

12 years 3 months ago
Cournot Equilibrium in Price-Capped Two-Settlement Electricity Markets
Abstract— We compare two alternative mechanisms for capping prices in two-settlement electricity markets. With sufficient lead time and competitive entry opportunities, forward market prices are implicitly capped by competitive pressure of potential entry that will occur when forward prices rise above a certain level. Another more direct approach is to cap spot prices through regulatory intervention. In this paper we explore the implications of the two alternative mechanisms in a two settlement Cournot equilibrium framework. We formulate the market equilibrium as a stochastic equilibrium problem with equilibrium constraints (EPEC) capturing congestion effects, probabilistic contingencies and market power. As an illustrative test case we use the 53bus Belgian electricity network with representative generator cost but hypothetical demand and ownership assumptions. When compared to two-settlement systems without price caps we find that either of the price capping alternatives results ...
Jian Yao, Bert Willems, Shmuel S. Oren, Ilan Adler
Added 24 Jun 2010
Updated 24 Jun 2010
Type Conference
Year 2005
Where HICSS
Authors Jian Yao, Bert Willems, Shmuel S. Oren, Ilan Adler
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