Electricity Markets

Over the last 20 years, he has published research on auction theory and practice in the leading peer-reviewed economics journals. During the last 12 years, he has applied this research in the design and implementation of auction markets worldwide, especially in North America and Europe. He has led the design and implementation of dozens of high-stake auctions in the energy and telecommunication industries. He has advised over 26 companies on bidding strategy in energy and telecommunication auctions. Since 1998, he has advised ISO New England on electricity market design, and with Steven Stoft led the design of the proposed forward capacity auction in New England. He received his B.S. in Engineering from Cornell University and his Ph.D. in Business from Stanford University.

Competitive Electricity Markets are based on a set of hypotheses which sustains a vertical and horizontal segmentation of the generation, transmission and distribution sectors in different functions. This theoretical model was implemented in several countries and its operation for more than a decade produced a great amount of data which are analyzed by the Public Authorities to take further decisions. Proposals regarding reforms for this type of markets must be based on a deep knowledge of different factors influence on the market parameters. Consequently, it is important to have methodologies and statistical techniques to help Public Authorities take decisions. In this paper, the application of the methodology of analysis of variance of multivariate data (MANOVA) to detect the impact of the fuel consumption on the market price is presented. A two factors fixed effect model is used; two-level factors for fuel-oil and two-level factors for natural gas. The random variable observed is a vector of twentyfour components which correspond to the 2005 market price in the Argentinean Electricity Market.

The research is based on the impact of globalization and trade liberalization on textile exports of Pakistan. The era of globalization does not only evolved the global culture towards diversification but also its implications on global trade, business and country wise exports. In this research four variables are used as proxy to globalization (Global Internet Penetration, Regional Competition, FDI, and Openness to Trade) to find their impact on one independent variable (Pakistan Textile Exports). Quantitative research approach is used and co-relational research design is applied on 16 years data from year 2001 to 2016. Descriptive analysis, Correlation analysis and Regression analysis is performed on the arranged data to find the impact of Globalization on Textile exports of Pakistan.

KEYWORDS:
Globalization, Textile, Exports, Pakistan, Global internet penetration, Regional Competition, FDI, Openness to trade

Turkish electricity industry is in a process of reform and restructuring; targeting competitive generation and supply markets. The very first steps of this process were vertical unbundling and creation of legislative framework. Moreover, the distribution companies and small part of the public generation facilities have been privatized. The next step is the privatization of the largest part of public generation facilities which are also have the largest market share in the country’s generation capacity. During this process, one of the most challenging issue before Turkish Competition Authority is determination of the dominance of the generation undertakings in wholesale markets. Therefore, “determination of dominant position in electricity generation” is chosen as the main title of this study. To determine dominance, first of all, the structure and design of the electricity markets are analyzed. Then, the role of market power –which could be interpreted as the economic base of the concept of dominance- within the wholesale markets, is studied. Especially using market power via strategic capacity withholding and raising the price above competitive levels is considered. The next part of the study focuses on relevant market determination where temporal dimension of the relevant markets is also analyzed. The last part is titled as “dominant position analysis” and focuses on the quantitative and qualitative evaluation methods, where pivotal supplier and residual supply indices studied besides the qualitative criterion like entry barriers, generation portfolio and collective dominance. Taking into account the parallelism of the design and legislative framework of the Turkish electricity industry with European countries; the study is made under the light of European Commission decisions.

Electricity market activities and a growing demand for electricity have led to heavily stressed power systems. This requires operation of the networks closer to their stability limits. Cost effective solutions are preferred over network extensions. The flexible alternating current transmission system (FACTS), a new technology based on power electronics, offers an opportunity to enhance controllability, stability, and power transfer capability of ac transmission systems. This paper provides a comprehensive review and evaluation of FACTS controllers.

This paper empirically compares the predictive accuracy of a set of methods for day-ahead spot price forecasting in the Spanish electricity market. The methods come from time series analysis and artificial intelligence disciplines, and include univariate, multivariate, linear and nonlinear. Within the univariate methods, the double seasonal ARIMA and the recently proposed exponential smoothing for double seasonality are compared and used as benchmarks.

More than 20% of the electricity generated in India is lost to rampant thefts. Drawing data from 28 states
of India over a time span of five years (2005–2009), this paper examines the role played by socio-economic and governance factors in determining the extent of electricity thefts in Indian states. Results from the Feasible Generalised Least Squares(FGLS) model demonstrate that lesser corruption, higher state tax to GDP ratio, greater collection efficiency of electricity bills by state utilities, higher share of private installed capacity, lesser poverty, greater literacy and greater income are closely associated with lesser power thefts. A better understanding of the key determinants of thefts in electricity distribution is vital for policymakers for designing policies.

This paper quantifies the increased green house gas emissions and negative effect on energy conservation (or “efficiency penalty”) due to electric rate structures that employ an unavoidable customer charge. First the extent of customer charges was determined from a nationwide survey of U.S. electric tariffs. To eliminate the customer charge nationally while maintaining a fixed sum for electric companies for a given amount of electricity, an increase of 7.12% in the residential electrical rate was found to be necessary. If enacted, this increase in the electric rate would result in a 6.4% reduction in overall electricity consumption, conserving 73 billion kW-hrs, eliminating 44.3 million metric tons of carbon dioxide, and saving the entire U.S. residential sector over $8 billion per year. As shown here, these reductions would come from increased avoidable costs thus leveraging an increased rate of return on investments in energy efficiency, energy conservation behavior, distributed energy generation, and fuel choices. Finally, limitations of this study and analysis are discussed and conclusions are drawn for proposed energy policy changes.

c Market model to optimize CSP plant configuration in North African power systems. c Value of storage-based CSP plants compared to non-dispatchable configurations: 28-55 h/MWh. c Assessment of Morocco's and Algeria's renewable electricity targets until 2030. c CSP becomes more competitive with intermittent technologies when high RES-E quota are targeted.

Existing trade relations in Portuguese electricity market have been subject to changes by checking if a phased withdrawal over the years of state intervention Portuguese since 1975.
Portugal's entry into the European Economic Community led to measures that would allow free competition of the actors in the production and sale of electricity. The Portuguese government was the monopoly of the electricity sector in 1975, which was being dissolved with the successive privatization and the separation of activities relating to each activity sector.
The opening of the electricity sector began with the permission to generate electricity for
consumption or sale to the grid, allowing produce electricity in a distributed manner to any citizen or company.
Currently in full-year 2013, there is a full liberalization of the sector, it is possible to any customer, regardless of the contracted power to choose your service provider.
Similar to what exists in other countries, you can create a picture of the market, which is a facilitator of trade relations between client and vendor (manufacturer / retailer) purchasing power and ensure the sale of the energy of the independent producer.
The facilitator trading in a market environment can be known as a commercial agent or aggregator, which attempts to minimize costs to consumers and producers maximize profits.
In an attempt to create a portfolio of clients, the commercial agent/aggregator will need to know the energy profile and the risk associated with each customer by calculating the profitability that comes from their trading on as MIBEL.
In this dissertation was idealized, a commercial agent/aggregator that uses the theory of
Markowitz portfolio of financial assets, applied to energy assets, a study was conducted to better define where the constitution of the portfolio, and built up the border/efficient surface area to view the risk/return.

The following article is a thesis on the  European Union Emissions Trading Scheme from a legal aspect. This thesis will analyze the essential legal instruments to determine the legal framework applicable to the price intervention mechanism of the European Union Emissions Trading Scheme (EU ETS). Such an analysis will encompass the legal instruments of Directive 2003/87/EC  and the Auctioning Regulation 1031/2010/EU  as connected to the issue of price volatility in the carbon market and subsequently to the issue of price volatility in the electricity market .
The foremost research will be about the issue of price volatility in the carbon market as an important concern occurred upon the introduction of the EU ETS and secondarily the interaction of this concern to the volatile prices in the power sector.
Towards this endeavor, the price intervention mechanism as provided in the legal instruments will be criticized in regards to its efficiency and its proper functioning. As a result, the issue to be determined will be whether this mechanism is expected to achieve its purpose as designed to or not.
For this purpose, the backloading measure  as recently proposed by the European Commission will be brought up for analysis. The impact of the acceptability of such a measure by the different stakeholders will be reviewed, as has been set under public discussion the last few months.  Even if such measure constitutes a concern referring explicitly to low carbon prices, such an analysis will get us familiarized to the challenging acceptability of such policies as proposed, underlining, inter alia, the expectations and needs of the interested stakeholders concerning the volatile carbon prices.
What is more, an assessment will be made regarding the issue of price volatility in the power sector as an important problem occurred under the introduction of the EU ETS and the interaction of this problem to the volatile prices in the carbon market.  This challenging interaction will be stated and analyzed further in a succeeding chapter.
Furthermore, the need of redefinition of the current scheme will be pointed out regarding opportunities against potential market inefficiencies from price volatility. Such inefficiencies would be companies' increased production cost and the competitiveness  loss of their products  and the discouragement of business incentives .
Additionally, this thesis will come across the necessity to mitigate price volatility in the carbon market within European Union in the long run. For this purpose, a proposal will be made regarding the choice of an optimal policy instrument, through a comparison of different policy instruments either within the European Union or not.  This comparison will be of assistance to understand the dynamics of the current scheme and the potential of a modified scheme empowered with design features that could substantiate an efficient policy after all.

Price forecasting has been at the center of intense studies since the introduction of competition in Electricity industry. Price forecasts are a fundamental input to an energy company's decision making and strategy development. The present approach is an attempt to forecast day-ahead electricity prices using time series of historical data. A combination of Weighted nearest neighborhood and wavelets is used to forecast the next day electricity prices. The methodology is applied to historical data pertaining to California Electricity Market. The performance of the method is discussed with Mean Absolute Percentage Error (MAPE).

This paper proposes a pool-based demand response exchange (DRX) model in which economic demand response (DR) is traded among DR participants as an alternative for managing the variability of renewable energy sources (RES). Load curtailment bids are provided by individual DRX participants and the DRX is cleared by maximizing the total social welfare, which is subject to supply-demand balance and individual bidders' inter-temporal operation constraints. The proposed DRX model is further integrated in the current context of the ISO's day-ahead scheduling in electricity markets. A two-step sequential market clearing framework is presented in which the ISO's stochastic day-ahead scheduling is simulated first for calculating the expected locational marginal prices (LMPs) and then, the proposed DRX is cleared successively using the expected LMPs. The simulation of the ISO's stochastic day-ahead scheduling incorporates random outages of system components and forecast errors for hourly renewable generation and loads. The decompositionbased method is employed to solve the ISO's day-ahead scheduling in the base case and scenarios. Numerical tests are performed for a 6-bus system and an IEEE 118-bus system. The results demonstrate the benefit of utilizing the DRX model for customer market participation in the ISO's day-ahead market scheduling.

In a competitive electricity market, a generation company (GenCo) optimizes its operation schedules, referred to as self-scheduling, in order to maximize its profit. However, various sources of uncertainty, such as market price fluctuations or forced outage of generating units, may impact the GenCo's profit. In this paper, a non-probabilistic information-gap model is proposed to model the uncertainties in short term scheduling of a GenCo. The self-scheduling problem is formulated for risk-neutral, risk-averse, and risk-seeker GenCos. Robustness of the decisions against low market prices are evaluated using a robustness model. Furthermore, windfall higher profit due to unpredicted higher market prices is modeled using an opportunity function. The proposed models are applied to a 54-unit thermal GenCo. His research focuses on economics, planning, and management of intelligent electric energy systems in a competitive electricity market environment.

, and Rich Gentry for their background research. We would also like to thank the World Bank staff and attendees at the review meetings at Eynsham Hall and Arlie House for their helpful suggestions and comments. The authors take responsibility for all errors and omissions. This paper was first published with the title: "Annotated Reading List for a Body of Knowledge on: The Regulation of Utility Infrastructure Services." If you have any questions or comments on this initiative, please contact the World Bank Task Manager, Lorenzo Bertolini, at [email protected]. The Regulation of Utility Infrastructure and Services: An Annotated Reading List Table of Contents INTRODUCTION NOTE ON REFERENCES OVERVIEW OF UTILITY REGULATION CHAPTER I. GENERAL CONCEPTS Case Studies Chapter I Cases by Topic Area A. Rationale for regulation, including regulation of monopolies and oversight of competitive markets, public interest theory, interest group theory, and the difference between normative and positive theories of regulation. B. Rationale for reform of utility markets (e.g. fiscal constraints, technological change, policy innovations, incentives for efficiency) and the elements of market reform, including private participation, liberalization, and regulation.

The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Stefano Bartolini since September 2006, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society.

UK energy policy has evolved since the 2002 Energy Review (PIU, 2002) in which Tony Blair introduced the report and noted that "securing cheap, reliable, and sustainable sources of energy has long been a major concern for governments". The new Department of Energy and Climate Change, DECC, has rephrased its objectives 3 to "ensure our energy is secure, affordable and efficient" and "bring about a transition to a low-carbon Britain". The shift from "cheap" to "affordable" is significant, as meeting the low-carbon (low-C) targets will not be cheap, but should be affordable. We forget that in the interwar period electricity prices were three to four times more expensive than now in real terms. Since then dramatic improvements in efficiency have allowed costs and prices to fall. If one considers that real wages have improved by a factor of four over this period, electricity prices relative to earning power are now less than one tenth of their interwar level.

Electricity market models are widely employed to study the role, impacts and economic viability of new technologies. Sources of arbitrage, such as storage and transmission, are increasingly seen as essential for integrating higher shares of variable renewables. Understanding their operation and business case requires models which accurately represent time-series of wholesale electricity prices. We show that the prevailing assumption of generators bidding short-run marginal cost, such as in the merit order stack, substantially underestimates the spread and volatility of hourly wholesale prices. To compound this, the lack of transparent outputs from previous electricity market modelling studies makes it impossible to scrutinise the prevailing methods or provide a detailed inter-comparison. We demonstrate a simple modification to the short-run marginal cost approach that delivers improved variability in modelled prices: allowing generators to make a spread of bids, below cost for their first megawatts of capacity, above for their last. Using this model we demonstrate the impact of price variability on the operation and profitability of storage, highlighting the urgent need for greater awareness of this aspect of market model performance.

Las fuentes no convencionales de energía renovable (FNCER) son fuentes de energía consideradas como una alternativa limpia para el suministro de electricidad frente a generación eléctrica a base de combustible fósiles. Además, son un medio por el cual se reduce el nivel de concentración en el mercado y la participación de la demanda se pueden dar. En este artículo se presenta diferentes mecanismos de integración de estas fuentes en el mercado, y se analiza su efecto sobre el precio de la electricidad en Colombia. Bajo las condiciones de simulación definidas, los resultados indican que una participación del 20% de las FNCER en el cubrimiento de la demanda de forma distribuida genera una reducción del 22% en el precio de la electricidad en el largo plazo.

In the United States, the bulk sale of electricity is conducted through an auction mechanism known as bid cost minimization. This mechanism works by minimizing the total supply bid costs to select bids. Over the last decade however, electricity suppliers have exercised market power, forcing the price of electricity up and resulting in very high payments for utilities and consumers. As a result, a new auction mechanism known as payment cost minimization was proposed. Initial research indicates that payment cost minimization is effective in reducing the total payment to utilities and consumers. To verify this, we simulate two market conditions to compare the two auction mechanisms -the first under regular market conditions, and the second under the influence of market power. We find that payment cost minimization is effective in reducing the total payments under regular market conditions, but may not be as effective when there is an influence of market power in the auction. Therefore, we proposed other ways to combat the influence of market power in the electricity market.

This paper studies the effects of learning and risk aversion on generation company (GenCo) bidding behavior in an oligopolistic electricity market. To this end, a flexible agent-based simulation model is developed in which GenCo agents bid prices in each period. Taking transmission grid constraints into account, the ISO solves a DC-OPF problem to determine locational prices and dispatch quantities. Our simulations show how, due to competition and learning, the change in the risk aversion level of even one GenCo can have a significant impact on all GenCo bids and profits. In particular, some level of risk aversion is observed to be beneficial to GenCos, whereas excessive risk aversion degrades profits by causing intense price competition. Our comprehensive study on the effects of Q-learning parameters finds the level of exploration to have a large impact on the outcome. The results of this paper can help GenCos develop bidding strategies that consider their rivals' as well as their own learning behavior and risk aversion levels. Likewise, the results can help regulators in designing market rules that take realistic GenCo behavior into account.

The scholarly literature on law and social movements has historically focused on public law issues like environmentalism, reproductive rights, and race relations, while staying far away from business and firm behavior. Business behavior was easily understood as that of self-interested profit-maximizers, and therefore left to the economists. Recently, however, social movement theorists have begun paying more attention to the business world. While traditional economic models can explain why businesses pursue higher profits, greater market shares, and superior regulatory climates, it is limited in its ability to explain how wish becomes reality. The formation and identification of market opportunities are products of social forces, and firms are part of that process—both shaping and being shaped by social dynamics which create and recreate the economic terrain.

This article joins that burgeoning literature by applying a social movements approach to the energy law field. Specifically, it looks to how voluntary Renewable Energy Credit (REC) sales—selling the “clean” in “clean electricity”—could restart the moribund movement towards increased electricity market competition (known as “restructuring”). While electricity restructuring gained considerable momentum from the late 1970s through the 1990s, the movement was crippled by the high-profile Enron collapse in 2001. Efforts to restart the debate have foundered as restructuring proponents have had no point of entry to connect with consumers or influence policymakers in states dominated by incumbent electricity monopolies. Voluntary REC sales, which entail sale of an electricity “product” that bypasses the physical transmission network, offers a “foot in the door” for new market entrants who can connect with consumers and reshape their public image free from interference by the extant monopoly. From a business standpoint, the benefit of entering the voluntary REC market is less about direct revenues or profits from the sale, the traditional economic markers of success. Rather, REC sales are valuable for reasons well-known to social movement theorists—they can establish relationships and alliances in previously untapped social arenas, and alter public understandings of concepts and ideologies critical to the firm’s overall interests.

Various trends in power systems increase the need for network investments on the transmission level. In this paper we compare different investment criteria and transmission technologies to determine where and how the network should be reinforced. We deploy an agent-based model taking explicitly into account that generation companies might behave strategically by submitting bids to the marketplace deviating from their true marginal cost. In a subsequent step we formulate the optimization problem of the Independent System Operator relying on the wellknown Locational Marginal Pricing market design. In a last step the ISO can decide for transmission investments, by reinforcing existing lines or installing Flexible AC Transmission Systems. We show that the decisions regarding which technologies should be used and what locations are to be chosen are not influenced by the strategic behavior of market participants. Additionally, we demonstrate -both analytically and through simulationsthat maximizing social welfare as investment criterion complements the objective of mitigating strategic behavior of individual players.

The Government of Montenegro is preparing an electricity tariff reform due to recent developments in the national and regional electricity markets. Electricity tariffs for residential consumers in Montenegro are likely to gradually increase by anywhere from 40 to over 100 percent. This significant price rise will impose a heavy burden on the poor households and it may adversely affect the environment. In an ex-ante investigation of the welfare impact of this price increase on households in Montenegro, we show that the anticipated price increase will result in a very significant increase in households' energy expenditures. A simulation of alternative policy measures analyzes the impact of different tariff levels and structures on the poor and vulnerable households in particular. Higher electricity prices could also significantly increase the proportion of households using fuelwood for space heating.

Historically Australia's ample supply of coal has underpinned its power system. Competing countries however have used a variety of different energy sources and, as a result of this diversity, many have a more resilient power system to provide future electrical power. this report looks at Australia's global position with respect to its resource-rich competitors.

h i g h l i g h t s " A two-stage stochastic offering model for a virtual power plant is presented. " The virtual power plant consists of an intermittent source, a dispatchable source and a storage unit. " The virtual power plant trades in the day-ahead and balancing markets. " Characteristic scenarios are thoroughly analyzed and relevant conclusions are drawn. a b s t r a c t A virtual power plant aggregates various local production/consumption units that act in the market as a single entity. This paper considers a virtual power plant consisting of an intermittent source, a storage facility, and a dispatchable power plant. The virtual power plant sells and purchases electricity in both the day-ahead and the balancing markets seeking to maximize its expected profit. Such model is mathematically rigorous, yet computationally efficient.

In a competitive electricity market, price forecasts are important for market participants. However, electricity price is a complex signal due to its nonlinearity, nonstationarity, and time variant behavior. In spite of much research in this area, more accurate and robust price forecast methods are still required. In this paper, a combination of a feature selection technique and cascaded neuro-evolutionary algorithm (CNEA) is proposed for this purpose. The feature selection method is an improved version of the mutual information (MI) technique. The CNEA is composed of cascaded forecasters where each forecaster consists of a neural network (NN) and an evolutionary algorithm (EA). An iterative search procedure is also incorporated in our solution strategy to fine-tune the adjustable parameters of both the MI technique and CNEA. The price forecast accuracy of the proposed method is evaluated by means of real data from the Pennsylvania-New Jersey-Maryland (PJM) and Spanish electricity markets. The method is also compared with some of the most recent price forecast techniques.

In September of 2000, the Chilean Energy Commission published a draft of a new electricity services law. One of the main changes was the replacement of the Chilean electricity pool by two new organizations, the Power Exchange and the Independent System Operator. Based on the experience of the electricity markets of California, England/Wales, Scandinavia, Colombia and Spain, and considering the characteristics of the Chilean market, an analysis is done in this paper on the consequences of such change and the effect on prices and dispatch. Topics such as market power, horizontal concentration, transmission constrains, the withdrawal of the capacity payment, must be carefully analyzed in a market design, considering the effects these issues may have in the competitiveness of the sector and the search for efficiency.

This paper considers the cost savings arising from wind generation through the merit order effect in gross pool electricity markets, using the Irish electricity market as a case study. The Irish electricity market makes for a good testing ground due to the fact that it is a single market with very little interconnection to other markets, allowing impacts of wind to be more clearly identified than on a more interconnected system. Ireland also has extremely ambitious renewable energy targets, resulting in a high penetration of wind generation. The authors estimate the historic cost savings arising from wind generation in the Irish electricity marketusing an hourly time series OLS regression model for 2009. We find that the value of wind to the market dispatch has resulted in savings of €141 million to the market dispatch. We find that the total costs to the market would have been in the region of 12% higher over the course of the year had no wind output been available. These savings a...

Promoting competition among electricity producers is crucial for ensuring allocative efficiency and lower electricity prices. In this paper, I empirically examine the electricity market of England and Wales in order to analyze to what extent the regulatory reforms were successful at promoting competition among electricity producers during 1995-2000. This research provides further evidence of the effects of the reforms undertaken by the regulatory authority during the liberalization process and could be also of interest to countries that created their wholesale electricity markets similar to the original model of the England and Wales wholesale electricity market. Abstrakt Prosazování konkurence mezi výrobci elektřiny je důležité, nebot' ve svém důsledku zajišt'uje alokační efektivnost a nižší ceny elektřiny. V tomtočlánku empiricky zkoumám trh elektřiny v Anglii a Walesu, kde analyzujiúspěšnost regulačních reforem při zavádění konkurence mezi výrobci elektřiny během let 1995-2000. Tento výzkum poskytuje další informace o efektivitě reforem, které regulační orgán provedl v průběhu liberalizace a je proto také vhodným informačním podkladem pro země, které reformovaly své velkoobchodní trhy elektřiny podobně jako tomu bylo v případě velkoobchodního trhu elektřiny v Anglii a Walesu.