A Comparison of Electricity Market Designs in Networks
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Authors
Ehrenmann, A.
Neuhoff, Karsten
Publication Date
2004-06-16Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics
Language
en_GB
Type
Working Paper
Metadata
Show full item recordCitation
Ehrenmann, A., & Neuhoff, K. (2004). A Comparison of Electricity Market Designs in Networks. https://doi.org/10.17863/CAM.5024
Abstract
In the real world two classes of market designs are implemented to trade electricity in transmission constrained networks. Analytical results show that in two node networks integrated market designs reduce the ability of electricity generators to exercise market power relative to separated market designs. In multi node networks countervailing effects make an analytic analysis difficult. We present a formulation of both market designs as an equilibrium problem with equilibrium constraints. We find that in a realistic network, prices are lower with the integrated market design.
Identifiers
This record's DOI: https://doi.org/10.17863/CAM.5024
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