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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
Auctions in the Electricity Market: Bidding When Production Capacity Is Constrained

Auctions in the Electricity Market: Bidding When Production Capacity Is Constrained

Schöne, Stefan

Paperback

Series: Lecture Notes in Economic and Mathematical Systems, Book 617

Business GeneralEconomicsTechnology & Engineering

ISBN10: 3540853642
ISBN13: 9783540853640
Publisher: Springer
Published: Dec 19 2008
Pages: 218
Weight: 0.85
Height: 0.60 Width: 6.10 Depth: 9.20
Language: English

Electricity is an essential commodity traded at power exchanges. Its price is very volatile within a day and over the year. This raises questions about the efficiency of the trading rules. The author develops a non-cooperative auction model analyzing the bidding behavior of producers at power exchanges. Producers are limited by the production capacity of their power plants. Production costs are affiliated. This allows for independence or positive correlation. The author analyzes and compares a uniform-price, a discriminatory, and a generalized second-price auction. Optimal bids, cost efficiency, profits, and consumer prices are examined. A simple probability density function of affiliated production costs is given and used for examples. Numerical results are presented. The results of the analysis can help improving the bidding strategies of producers, selecting the best auction type at power exchanges or detecting price manipulations.

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