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2000
IEEE

Strategic Behavior in Spot Markets for Electricity when Load is Stochastic

8 years 11 months ago
Strategic Behavior in Spot Markets for Electricity when Load is Stochastic
In the first part of the paper, daily price data for the past three summer seasons in the PJM wholesale market are used to estimate a stochastic regime switching model. These data show that the average price in 1999, when market-based offers were allowed, was twice as high as it was in the previous two seasons when offers had to be cost-based. The primary cause was that the price spikes in 1999 were much higher than they were in 1997-98, but not more frequent. The second part of the paper derives an optimum set of offers for individual suppliers endowed with different levels of market power. A supplier controlling generation equivalent to 20% of the expected load in the market is shown to submit offers that are up to 80% higher than the true cost. Nevertheless, these offers are still much lower than the offers that set the high prices in the PJM market. The explanation is that suppliers with sufficient market power are indifferent to whether or not marginal units are dispatched, and t...
Timothy Mount
Added 31 Jul 2010
Updated 31 Jul 2010
Type Conference
Year 2000
Where HICSS
Authors Timothy Mount
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