transmission system management and pricing new paradigms and international comparisons the transmission system once the necessary but nearly invisible component of the electric power system is now the focus of physical electrical and financial attention of the utility and more significantly their potential suppliers customers this paper has three primary objectives the first is to present a discussion of a new paradigm for the electric power industry the second is to review transmission pricing options specifically those utilizing either long run lrmc or short run srmc marginal cost based approaches the third is to provide a review of innovative approaches to transmission asset management and finance as seen from international experience

a cook s tour towards a framework for measuring the social impact of social purpose organisations for over 50 years operational researchers have advocated that operational research or could be considered as a useful set of ideas and methods for the benefit of society however this aspiration while still chiming today has yet to realise its full potential this paper focuses on organisations whose remit is to alleviate social problems and therefore have a social purpose they are under considerable pressure to demonstrate the impact of the work they do however showing the value of these organisations is not easy the paper contributes to this research gap by developing a framework for measuring the impact of social purpose organisations this is accomplished by bringing together current research on sen s capability approach and configurational theory and arguing for an integrative view to show the value of social purpose organisations

welfare effects of expansions in equilibrium models of an electricity market with fuel network the welfare of electricity producers and consumers depends on congestion in the transmission grid generation costs that consist mainly of fuel costs and strategic behavior we formulate a game theoretic model of an oligopolistic electricity market where generation costs are derived from a fuel supply network the game consists of a fuel dispatcher that transports fuels at minimum cost to meet generator demands generators that maximize profit in cournot competition and an independent system operator iso that sets nodal prices to balance electricity supply with linear demand functions we prove the existence of an equilibrium if fuel supplies are unlimited the same equilibria hold in a simplified version of the game in which each generator optimizes its fuel acquisition from the network in some very simple examples under different assumptions about the rationality of generators with respect to iso decisions paradoxical effects on total welfare can occur from expanding either electricity transmission capacity or the transportation capacity of low cost fuel we find some instances in which the paradox occurs only under bounded rationality of the generators others where it occurs only if the generators are fully rational and still others where it occurs to different degrees under the two rationality assumptions

optimal pricing of non utility generated electric power the importance of an optimal pricing policy for pricing nonutility generated power is pointed out in this paper an optimal pricing policy leads to benefits for all concerned the utility industry and the utility s other customers in this paper it is shown that reliability differentiated real time pricing provides an optimal nonutility generated power pricing policy from a societal welfare point of view firm capacity purchase and hence an optimal price for purchasing firm capacity are an integral part of this pricing policy a case study shows that real time pricing without firm capacity purchase results in improper investment decisions and higher costs for the system as a whole without explicit firm capacity purchase the utility makes greater investment in capacity addition in order to meet its reliability criteria than is socially optimal it is concluded that the nonutility generated power pricing policy presented in this paper and implied by reliability differentiated pricing policy results in social welfare maximizing investment and operation decisions

strategic generation capacity expansion planning with incomplete information to study the competitive behavior among individual generating companies gencos an incomplete information game model is proposed in this paper in which each genco is modeled as an agent each agent makes strategic generation capacity expansion decisions based on its incomplete information on other gencos the formation of this game model falls into a bi level optimization problem the upper level of this problem is the gencos own decision on optimal planning strategies and energy reserve bidding strategies the lower level problem is the iso s market clearing problem that minimizes the cost to supply the load which yields price signals for gencos to calculate their own payoffs a co evolutionary algorithm combined with pattern search is proposed to optimize the search for the nash equilibrium of the competition game with incomplete information the nash equilibrium is obtained if all gencos reach their maximum expected payoff assuming the planning strategies of other gencos remain unchanged the physical withholding of capacity is considered in the energy market and the herfindahl hirschman index is utilized to measure the market concentration the competitive behaviors are analyzed in three policy scenarios based on different market rules for reserve procurement and compensation

intelligent agents for negotiations in market games 2 application for part i see ibid vol 13 no 5 p 1103 8 1998 in competitive markets human decision makers need assistance to determine potential coalitions that they can be part of note that such coalitions are legal provided market power is not monopolized we present an approach for designing specialized intelligent software agents that perform negotiations on behalf of their human counterparts and then suggest market strategies that the human can adopt our negotiation protocol is derived from cooperative game theory however it differs from the game theory literature in requiring virtually no trustworthy information exchange between the potential coalition partners in the part i we presented the negotiation model in this paper we apply it to power markets

modeling greenhouse gas reduction from the australian electricity sector the australian electricity sector is expected to undergo major changes to reduce the current sectoral co2 emission of 190 million tons to 96 million tons by 2050 this paper summarizes two major modeling studies that have been undertaken since 2006 to understand the full set of investment price and financial impact on existing generators especially coal based generators we have used a long term capacity and dispatch optimization model to comprehensively analyze both least cost and market led expansion of the system to accommodate alternative emission reduction targets from a shallow cut to a deep cut the modeling results demonstrate the cost of meeting the target can be over 30 billion in npv terms a mix of clean coal technologies gas and nuclear technologies is expected to displace the existing stock of conventional coal which varies significantly depending on the emission reduction target the analysis also show that mandatory renewable targets or technology standards are inefficient policies in comparison to a market based policy such as the proposed emissions trading scheme

application of games with incomplete information for pricing electricity in deregulated power pools the authors present a game theory approach to the problem of pricing electricity in deregulated marketplaces they assume that an independent operator receives bids by pool participants and defines transactions among participants by looking for the minimum price that satisfies the demand in the pool the competition among pool participants is modeled as a noncooperative game with incomplete information they assume that each pool participant knows its own operation costs but does not know his opponents operation costs the game with incomplete information is transformed into a game with complete but imperfect information and solved using the nash equilibrium idea the approach presented in this paper is geared towards providing support for pricing electricity in deregulated pools

gaming and price spikes in electric power markets many challenging issues arise under the newly deregulated competitive electric power markets instead of centralized decision making in a vertically integrated environment as in the past decision making is now decentralized and driven by market forces gaming and price spikes have been observed in almost every electricity market but explicit analysis of these phenomena is rare in this paper the authors study historical bidding behavior to see how power suppliers and demand service providers were actually bidding in the california day ahead energy market based on their observations they formulate a prisoner s dilemma matrix game and introduce the notion of opportunistic tacit collision to explain strategic bidding behaviors in which suppliers withhold generation capacity from the market to drive up prices this explanation is applicable with or without market power transmission constraints and insufficient supply and is only enhanced by these factors their analysis is generally applicable to any uniform price electricity market in which there is significant insensitivity to price on the demand side

nash equilibrium bidding strategies in a bilateral electricity market this paper examines bidding strategies in a bilateral market in which generating companies submit bids to loads a load accepts electricity delivery from the generator with the lowest bid at its bid price as long as this price is not higher than the load s willingness to pay necessary and sufficient conditions of nash equilibrium ne bidding strategy are derived based on a generic generating cost matrix and the loads willingness to pay vector the study shows that in any ne efficient allocation is achieved furthermore all nash equilibria are revenue equivalent for the generators based on the necessary and sufficient conditions this problem is formulated as an optimal assignment problem network optimization techniques are applied to calculate ne bid prices for the generators

internal supply chain coordination in the electric utility industry abstract electric utilities have a well established vertical internal and external supply chain theoretically information sharing involving production inventory and other policy variables between chain entities can improve supply chain performance such sharing relies on a systematic determination of the optimal policy variables for the chain this paper presents an analysis of the electric utility s decision problem based on an optimal control model in a competitive market environment optimal production and inventory policies are developed for a centralized supply chain under full information sharing the model and policies are tested with electric utility industry data and performance implications are discussed for electric utility managers and public regulators

market equilibrium under incomplete and imperfect information in bilateral electricity markets in contrast to the centralized pool model bilateral markets present a decision making situation in which information plays a major role along with the physical and operative constraints of the network we propose a model that includes network constraints for competitive bilateral electricity markets based on an evolutionary bipartite complex network in which the nodes and weighted links represent the players and transactions respectively the strong stable equilibrium of the network is applied to detect possible market equilibria obtained through a dynamic game with incomplete and imperfect information in which the players form an evolutionary network while trying to maximize their own utilities the model is conceptually illustrated with a four bus test system and then applied to the ieee30 test system to analyze the impact of the transmission network and information on the equilibria and market performance

double sided auction mechanism design in electricity based on maximizing social welfare an efficient electricity double sided auction mechanism should control market power and enhance the social welfare of the electricity market based on this goal the paper designs a new double sided auction mechanism in the new mechanism the social welfare contribution of each participant plays a pivotal role because this contribution is the critical factor in market clearing payment settling and transaction matching rules in particular each winner of the auction can gain transfer payments according to his contribution to social welfare in the electricity market and this gives the mechanism the ability to control the market power of some participants at the same time this mechanism ensures that the market organizer balances his budget we then conduct a theoretical and empirical analysis based on the spanish electricity market both of the results show that compared to the uniform pricing mechanism the new mechanism can reduce market power of participants and enhance the social welfare of the electricity market

a mixed complementarity based equilibrium model of natural gas markets we present a new multiseasonal multiyear natural gas market equilibrium model based on the concept of a competitive equilibrium involving the market participants producers storage reservoir operators peak gas operators pipeline operators marketers and consumers the first three classes are depicted as price takers consistent with perfect competition the pipeline operations are described with regulated tariffs but also involve congestion pricing as a mechanism to allocate scarce pipeline capacity the marketers are price takers in all markets except in sales to consumers in which they compete as nash cournot players finally consumers are described by demand curves for each of the four sectors residential commercial industrial and electric power we show that the equilibrium model is an instance of a mixed nonlinear complementarity problem ncp and provide sufficient detail not generally seen in previous complementarity models of natural gas the ncp formulation is derived from considering the karush kuhn tucker optimality conditions of the optimization problems faced by these participants under mild conditions we show that this ncp has a solution and under additional reasonable conditions we show that the market prices are unique we also validate the model on a representative sample network with nine market participants and three seasons using four scenarios

economic and emissions implications of load based source based and first seller emissions trading programs under california ab32 in response to assembly bill 32 the state of california considered three types of carbon emissions trading programs for the electric power sector load based source based and first seller they differed in terms of their point of regulation and in whether in state to out of state and out of state to in state electricity sales are regulated in this paper we formulate a market equilibrium model for each of the three approaches considering power markets transmission limitations and emissions trading and making the simplifying assumption of pure bilateral markets we analyze the properties of their solutions and show the equivalence of load based first seller and source based approaches when in state to out of state sales are regulated under the cap a numeric example illustrates the emissions and economic implications of the models in the simulated cases leakage eliminates most of the emissions reductions that the regulations attempt to impose furthermore contract reshuffling occurs to such an extent that all the apparent emissions reductions resulting from changes in sources of imported power are illusory in reality the three systems would not be equivalent because there will also be pool type markets and the three systems provide different incentives for participating in those markets however the equivalence results under our simplifying assumptions show that load based trading has no inherent advantage compared to other systems in terms of costs to consumers contrary to claims elsewhere

using game theory to analyze electric transmission pricing policies in the united states abstract us public policy towards the private electric power industry is moving away from restrictive regulation and towards promotion of competition alternative policies concerning access to and pricing of transmission are now being discussed similar issues may arise in europe as trade barriers fall our purpose is to show how game theory can help illuminate that debate and identify desirable policies game theory models are used to estimate the possible effects of various policies upon productive efficiency and the distribution of gains among sellers transmitters and buyers of power static cooperative models are used to calculate the possible outcomes of short run transmission games long run games in which the amount of transmission capacity is a decisition variable are modeled as dynamic noncooperative stackelberg games one conclusion is that under some conditions price regulation and mandatory access could hurt power buyers by removing incentives for building transmission capacity another conclusion is that under a system of voluntary access and price regulation it may be better to allow wheeling prices to exceed the marginal cost of transport rather than to risk losing the benefits of cooperation

reliability differentiated pricing of spinning reserve this paper derives the spinning reserve pricing policy implied by the reliability differentiated pricing model and illustrates the importance of such a pricing policy the purchase of additional spinning reserve capacity at the prices derived leads to benefits for the customers through reduced real and reactive power prices and improved reliability of the power system and for the power system as a whole through reduced societal costs and less investment in system reinforcements the magnitudes and behavior of the optimal prices for real and reactive spinning reserve are illustrated in two case studies one case study determines reliability differentiated prices of real and reactive power for a sample four area power system with and without spinning reserve purchase and the optimal purchase prices for both real and reactive power spinning reserve capacities the results of this case study show that when reliability differentiated pricing is extended to both real and reactive power reserve it leads to benefits for customers and the power system as a whole a second case study examines the locational dependence of optimal prices for real and reactive reserves on the operating status of equipment in the 24 bus ieee reliability test system it is concluded that even small amounts of reliable reserve capacity purchase from neighboring electric utilities can improve the reliability of the power system and lower expected real and reactive power prices leading to gains in social welfare

an exact solution method for binary equilibrium problems with compensation and the power market uplift problem abstract we propose a novel method to find nash equilibria in games with binary decision variables by including compensation payments and incentive compatibility constraints from non cooperative game theory directly into an optimization framework in lieu of using first order conditions of a linearization or relaxation of integrality conditions the reformulation offers a new approach to obtain and interpret dual variables to binary constraints using the benefit or loss from deviation rather than marginal relaxations the method endogenizes the trade off between overall societal efficiency and compensation payments necessary to align incentives of individual players we provide existence results and conditions under which this problem can be solved as a mixed binary linear program we apply the solution approach to a stylized nodal power market equilibrium problem with binary on off decisions this illustrative example shows that our approach yields an exact solution to the binary nash game with compensation we compare different implementations of actual market rules within our model in particular constraints ensuring non negative profits no loss rule and restrictions on the compensation payments to non dispatched generators we discuss the resulting equilibria in terms of overall welfare efficiency and allocational equity

an oligopolistic model of an integrated market for energy and spinning reserve in this paper a model for oligopolistic competition in electricity markets is presented most previous proposed models have been static and focused only on the energy market incentives for strategic behavior in contrast in this paper a multiperiod market for energy and spinning reserve sr is considered by including such factors the competition among participants is modeled with more realism competition in the energy market is modeled by means of conjectured supply functions while conjectured reserve price response functions are used to consider the generators ability to alter the sr prices the resulting equilibrium problem is modeled in terms of complementarity conditions based upon a complementarity model the opportunity cost between the energy and sr markets is derived for oligopolistic markets the proposed model is illustrated by a six node network using a dc approximation

optimal fuel power and load based emissions trades for electric power supply chain equilibrium this paper proposes a model to determine equilibrium fuel power and emissions trades in an electric power supply chain fuel generation transmission distribution consumption framework with a load based lb emissions trading program the model represents the oligopolistic gaming behavior of generation companies gencos and load serving entities lses and equilibrium conditions for fuel power and emissions allowance markets which are integrated through endogenous prices the model is solved by using a practical heuristic method based on the fisher burmeister nonlinear complementarity function ncp and smoothing technique an application to a four node system with three gencos and lses is also presented to illustrate the effects of emission allowances trading renewable energy generation and network congestion on equilibrium solutions

changing food patterns in west africa implications for policy research abstract west african consumption of wheat and rice is growing rapidly despite technological barriers to production of these cereals in the region soaring imports are of particular concern in view of likely consumption trends maize imports are also growing rapidly as is production in the more humid countries to the detriment of sorghum the latter is performing relatively better in the drier countries possible factors underlying consumption shifts are discussed including price policies at variance with stated objectives possible policies to slow down these shifts are discussed along with research requirements for effective diagnosis and implementation

game theory approach to use of noncommercial power plants under time of use pricing the authors use the game theory approach for evaluating the impact of the introduction of customer owned noncommercial power plants ncp when time of use pricing is used various results from this analysis are derived some of which are that the conflict between ncp customer and the supplier forces the supplier to reduce the price of ncp customers perception of the situation in which they are involved in plays an important role in this conflict the game model analysis presented provides a detailed quantitative information on electricity prices and on the ways of using ncp

a continuous strategy game for power transactions analysis in competitive electricity markets this article presents a game theory application for analyzing power transactions in a deregulated energy marketplace such as poolco where participants especially generating entities maximize their net profits through optimal bidding strategies i e bidding prices and bidding generations in this article the electricity market for power transactions is modeled as a noncooperative game with complete information where the solution is determined in a continuous strategy domain having recourse to the nash equilibrium idea in order to provide more apprehensible analysis we suggest a new hybrid solution approach employing a two dimensional graphical approach as well as an analytical method finally the proposed approach is demonstrated on a sample power system

bidding strategy of virtual power plant for participating in energy and spinning reserve markets part i problem formulation this paper addresses the bidding problem faced by a virtual power plant vpp in a joint market of energy and spinning reserve service the proposed bidding strategy is a non equilibrium model based on the deterministic price based unit commitment pbuc which takes the supply demand balancing constraint and security constraints of vpp itself into account the presented model creates a single operating profile from a composite of the parameters characterizing each distributed energy resources der which is a component of vpp and incorporates network constraints into its description of the capabilities of the portfolio the presented model is a nonlinear mixed integer programming with inter temporal constraints and solved by genetic algorithm ga

the effect of market conduct on international steam coal trade abstract this paper is concerned with the determinants of international steam coal trade most quantitative work in explaining such trade has been stymied by the apparent failure of the competitive model to account for observed and anticipated trade flows in general authors have sought institutional explanations for this failure the hypothesis explored by this paper is that the exercising of market power by certain agents in the market can lead to trade patterns consistent with those observed and anticipated this hypothesis is explored through a simple model of imperfect market equilibrium in addition to perfect competition we examine cournot nash monopoly south africa duopoly south africa australia and duopoly monopsony south africa australia japan with a competitive fringe of producers us canada poland china colombia using the equilibrium model of coal trade we examine these market structures and evaluate the extent to which they can explain existing and anticipated trade patterns

strategic management of multi year natural gas contracts in electricity markets combined cycle gas turbine ccgt plants show some advantages such as better economies of scale or lower co2 emission rates in comparison to other technologies in addition due to their flexible operation ccgt plants are a useful support for the integration of the growing renewable energy installed capacity consequently during the last years ccgt plants have proliferated in electricity systems increasing the global demand of natural gas ng in order to guarantee the ng supply and to hedge the price volatility electricity generation companies gencos sign supply contracts with ng producers typically ng producers force long term contracts in order to recover their huge capital investments therefore gencos should optimize the exercise of the supply contracts in the long term scope in order to maximize their profits in the electricity market however the optimal exercise of the supply contracts on behalf of the gencos could be impeded because of possible bottlenecks in the ng system accordingly this paper proposes a methodology to incorporate both the characteristics of ng supply contracts and the congestions in the ng system in an electricity market model that could support the decision making process on behalf of the gencos a study case illustrates the methodology

transaction analysis in deregulated power systems using game theory the electric power industry is in transition to a deregulated marketplace for power transactions in this environment all power transactions are made based on price rather than cost a regional power pool is noted as the most straightforward path to a deregulated electricity marketplace however many questions remain unanswered regarding the economics of power pool participation in a deregulated energy marketplace participants are interested in maximizing their own profits regardless of the system wide profits it is perceived that competition will reduce the price of electricity for retail customers however the key issue for participants is related with the price definition to remain competitive in this paper the authors use game theory to simulate the decision making process for defining offered prices in a deregulated environment the outcome of this study may be used by power pool coordinators to discourage unfair coalitions a modified ieee 30 bus power system is used as a deregulated power pool to illustrate the main features of the proposed method

computing all nash equilibria of multiplayer games in electricity markets by solving polynomial equations the analysis of the nash equilibrium ne in electricity markets with imperfect competition is subject to two major challenges the treatment of multiplayer games and the determination of the existence of multiple market equilibria to resolve these obstacles a solution method based on the payoff matrix approach and polynomial equations is proposed in this paper to calculate all the nash equilibria of multiplayer games in the electricity markets first the proposed method decomposes the game by means of a set of all pure strategies assigned with positive probabilities support for each possible support the ne condition can be characterized by a set of polynomial equations with inequality constraints next the homotopy continuation algorithm is employed to obtain all solutions of the polynomial system finally all nash equilibria can be found by verifying each solution of all polynomial systems two example systems one involving the cournot model and the other based on the supply function equilibrium sfe model are applied to test the proposed method respectively the results show that the proposed method has the ability to identify all ne under certain conditions indicating that the proposed algorithm is useful for providing insights into the theoretical analysis of electricity markets

permit banking in emission trading competition arbitrage and linkage abstract several existing or proposed climate policies have considered bankable permits in a cap and trade c t program that covers beyond a single sector e g electric power or allows the program to link to external c t programs in other regions this paper develops a model of permit banking under imperfect competition and imperfect inter temporal arbitrage in which the firms in one dominant sector can exert market power in both product and permit markets while those in other sectors or linked programs are perfectly competitive a simple analytical model is developed to generate contestable hypothesis we further extend the model to account for the physical power system institutional rules and market conditions and then apply it to the pennsylvania jersey maryland pjm market we show that if the dominant firm has market power then the permit price rises at a higher rate than the discount rate contrary to perfectly competitive permit market where the permit price rises at the discount rate following the classic hotelling s rule furthermore under a declining emissions cap system with the permits front loaded in early time periods the dominant firm has an incentive to suppress the permit prices monopsony when buying the permits in early periods and then inflate the permit prices monopoly when selling them in later periods numerical results of the pjm case are consistent with the analytical conclusion

electricity market near equilibrium under locational marginal pricing and minimum profit conditions this paper provides a tool to determine the near equilibrium of an electric energy market this market works under locational marginal pricing i e generating units and demand loads are paid and pay respectively the locational marginal prices corresponding to the nodes they are connected to the near equilibrium is defined as the energy transaction levels for which generating companies maximize their respective profits and consumption companies maximize their respective utilities an independent system operator clears the market maximizing the social welfare conditions that ensure minimum profit for generating units can be included however these conditions may render a generating unit uncompetitive and expel it from the market demands are taken to be non constant and values are determined as part of the solution the near equilibrium is obtained through the solution of a mixed integer quadratic problem equivalent to a mixed linear complementarity problem that includes the minimum profit conditions it is important to note that the near equilibrium concept presented in this paper does not solve a market equilibrium when indivisibilities such as start up costs or the like are present lastly we validate the proposed model on a case study using data from the ieee reliability test system

on the effectiveness of tradable performance based standards abstract two types of emission trading programs are allowed under the us federal clean power plan cpp mass based cap and trade c t program and the performance based trading program while a c t sets a total emission cap for a region a performance based program under cpp relies on trading the emission rate credits ercs which represent an equivalent mwh of energy generated or saved with zero associated co 2 emissions to reduce emission costs this paper examines the theoretical properties of the tradable performance based policy and compares it to a c t program we distinguish two kinds of tradable performance based policy 1 a regional policy under which all states are subject to a regional performance based standard and 2 a state by state policy under which each state adopts its performance based policy within a regional power market while trading of ercs is allowed our findings indicate that under a state by state policy power prices across states could be different even without any transmission congestion reflecting varying stringency of tradable performance based standards among states within an interconnected market we also identify a counterintuitive result that even if ercs trading is allowed under the state by state performance policy the permit prices could diverge two models are simulated in our analysis three state and the pennsylvania jersey maryland pjm regional power market while the three state example allows us to illustrate the theoretical properties of the policies the pjm based simulation allows us to gauge the performance of the policies our pjm analysis shows that a c t policy is the most effective while the comparison between a regional and state by state tradable performance policy is ambiguous

oligopolistic competition of gencos in reactive power ancillary service provisions the need for a market based approach for reactive power procurement has been recognized by ferc due to the localized characteristic of reactive power regulatory mechanisms are necessary to mitigate the possibility of holding market power by generators the regulator is responsible for devising the regulatory mechanisms that provide incentives to generators to supply reactive power while preventing the abuse of market power this paper proposes a mathematical model to simulate the strategic behavior of generators supplying reactive power while considering the system operator s schedule the proposed method can be used by the regulator to simulate the market behavior in the reactive power supply we further study how regulatory policies affect the strategic behavior an alternative price cap method has been proposed and tested in the numerical example to mitigate the effect of strategic behavior of generators in reactive power procurement by the system operator the numerical examples are tested on the nordic 32 bus system

optimal multi area wheeling an important consideration in wheeling is where a transaction involves several parties that is multi area wheeling power from seller to buyer flows through several intermediate utilities each utility represents an individual control area engaged in part of a more complex wheeling transaction individual wheeling rates then have to be computed for each area the question of how much energy should be transported through each path and what wheeling price should be paid is then an issue of importance this is formulated as a nonlinear optimisation program with linear constraints and solved by a gradient projection method the availability of facts capability to implement the optimal wheeling strategy once determined is assumed in this paper

a combined modeling approach for wind power feed in and electricity spot prices abstract wind power generation and its impacts on electricity prices has strongly increased in the eu therefore appropriate mark to market evaluation of new investments in wind power and energy storage plants should consider the fluctuant generation of wind power and uncertain electricity prices which are affected by wind power feed in wpf to gain the input data for wpf and electricity prices simulation models such as econometric models can serve as a data basis this paper describes a combined modeling approach for the simulation of wpf series and electricity prices considering the impacts of wpf on prices based on an autoregressive approach thereby wpf series are firstly simulated for each hour of the year and integrated in the electricity price model to generate an hourly resolved price series for a year the model results demonstrate that the wpf model delivers satisfying wpf series and that the extended electricity price model considering wpf leads to a significant improvement of the electricity price simulation compared to a model version without wpf effects as the simulated series of wpf and electricity prices also contain the correlation between both series market evaluation of wind power technologies can be accurately done based on these series

implications of the eu emissions trading system for the south east europe regional electricity market as part of its climate policy the european union eu aims to reduce greenhouse gas ghg emissions levels by 20 by the year 2020 compared to 1990 levels although the eu is projected to reach this goal its achievement of objectives under its emissions trading system ets may be delayed by carbon leakage which is defined as a situation in which the reduction in emissions in the ets region is partially offset by an increase in carbon emissions in the non ets regions we study the interaction between emissions and hydropower availability in order to estimate the magnitude of carbon leakage in the south east europe regional electricity market see rem via a bottom up partial equilibrium framework we find that 6 3 to 40 5 of the emissions reduction achieved in the ets part of see rem could be leaked to the non ets part depending on the price of allowances somewhat surprisingly greater hydropower availability may increase emissions in the ets part of see rem however carbon leakage might be limited by demand response to higher electricity prices in the non ets area of see rem such carbon leakage can affect both the competitiveness of producers in ets member countries on the periphery of the ets and the achievement of eu targets for co2 emissions reduction meanwhile higher non ets electricity prices imply that the current policy can have undesirable outcomes for consumers in non ets countries while non ets producers would experience an increase in their profits due to higher power prices as well as exports the presence of carbon leakage in see rem suggests that current eu policy might become more effective when it is expanded to cover more countries in the future

evaluation of wheeling and nonutility generation nug options using optimal power flows the application of optimal power flow for the evaluation of wheeling and nonutility generation nug related options is presented both wheeling and nug options affect vital attributes such as system security voltage profile losses and var reserves these options put a strain on the existing transmission system and may restrict economic utility dispatching optimal power flows may be used to determine the best control settings to accommodate wheeling or nug options so as to maintain system security while minimizing losses or production cost short term marginal wheeling costs may be derived using optimal power flows case studies involving the northeast utilities and ieee test systems are presented these cases show that optimal power flows can be used effectively to address a broad range of wheeling or nug related planning issues

cost of wheeling methodologies the cost of wheeling and the methodology by which it is computed is a high priority problem throughout the power industry due to the growth in transmission facilities the cost differentials between utility companies and the dramatic growth in nonutility generation capacity this paper contains descriptions and summaries of computational procedures and data requirements of four embedded cost methodologies two long run incremental cost methods and the short run marginal cost method four methodologies are also presented for allocating the wheeling costs among a number of wheels when simultaneously present on a company s system as required for the standard long run incremental cost method

cost benefit analysis and environmental policy the use of cost benefit analysis cba in british environmental policy has gone through several stages early applications of cba tended to ignore environmental impacts altogether leave them for a subsidiary impact analysis or provide only a partial monetization of impacts currently cba is the subject of renewed interest in government departments in the environment agency and among other agencies providing guidance and advice to government while the amount of cba being undertaken has increased its influence on policy making is open to question obstacles remain much cba is expensive and this means that benefits transfer is widely regarded as essential currently however the validity of much benefits transfer is questionable other problems arise from misunderstandings about the nature of economic values and the links to individuals self interest and from concerns that cba results will crowd out flexibility in decision making especially the likely context of multiple political objectives over and above economic efficiency none the less cba has begun to have influence in the setting of environmental taxes and alternative decision rules appear to suffer as many if not more shortcomings as those faced by cba copyright 1998 by oxford university press

meat marketing in burkina faso after the devaluation of the fcfa insights into the functioning of informal market systems abstract the strategies that participants in informal african markets adopt in response to shocks have rarely been analysed yet these can provide important insights into how such markets function policy advice often seeks to modernise trading practices within such markets so as to improve efficiency however efforts to improve efficiency could have undesirable consequences if the current functioning of the markets is inadequately understood in burkina faso the fcfa devaluation in 1994 led to increasing livestock exports and a subsequent meat shortage on the domestic market based on market statistics from burkina faso and household interviews the study investigates the status of meat consumption before and up to four years after the devaluation results indicate that the price increase for cattle was only transmitted to consumers after a time lag meat is more frequently sold in little heaps than on a weight basis lower per kg prices of smaller size heaps imply an income gain for poorer consumers butchers use all edible body parts in addition to the carcass i e head hoofs intestines to buffer price fluctuations and to cope with the consumers notion of a fixed nominal price this suggests that butchers and their clients are embedded in networks of what s plattner 1989 economic behavior in markets in plattner s ed economic anthropology stanford pp 209 222 called equilibrating economic relations which are favoured by the perishable nature of meat selling live animals or meat by weight is often considered as a measure to increase transparency within informal markets however the introduction of formalized or standardized marketing measures alone without lowering the transaction costs of other components of the value chain risks undermining the equilibrating social relationships that play an important role particularly for the poorer market actors and thereby disadvantaging vulnerable population groups

the costs of wheeling and optimal wheeling rates wheeling is the transmission of electrical energy from a buyer to a seller through a transmission network owned by a third party this paper provides a theoretically sound yet practical to implement basis for setting wheeling rates these wheeling rates are based on marginal costs determined by losses and effects of line flow and voltage magnitude constraints adjusted up or down as necessary to account for embedded capital costs i e revenue reconciliation simple numerical examples are provided to illustrate interesting phenomena such as negative wheeling rates which yield positive net revenue comparisons with present day wheeling rates show that major differences exist the wheeling rates of this paper yield a no lose situation for the buying selling and wheeling utilities

optimization based inter utility power purchases effective power transaction decisions can result in significant savings since marginal generation costs of neighboring utilities could be quite different transactions however are coupled with the scheduling of units through system demand and reserve requirements and are confined by many accustomed rules how to make effective transaction decisions is therefore a very difficult problem in this paper an optimization based method for the integrated consideration of power purchase transactions and the scheduling of thermal units is presented based on the augmented lagrangian decomposition and coordination method after the system wide demand and reserve requirements are relaxed by using lagrange multipliers and penalty coefficients the overall problem is decomposed into purchase and thermal subproblems for a purchase subproblem the optimal purchase level for each purchase interval is first determined the subproblem is then efficiently solved by using the dynamic programming approach without discretizing purchase levels thermal subproblems are solved by extending the author s previous method the multipliers and penalty coefficients are then updated at the high level so that system demand and reserve requirements are gradually satisfied over iterations numerical testing results based on modified northeast utility s data show that the algorithm is efficient and significant savings can be obtained

equilibrium pricing and lead time decisions in a competitive industry pricing and lead time are two crucial decisions to a success in today s competitive markets this paper examines the equilibrium pricing and lead time decisions in a duopoly industry consisting of two large and several smaller firms with competition we solve the sufficient karush kuhn tucker kkt optimality conditions for the nash equilibrium solution we characterize the existence and uniqueness of the nash equilibrium solution of pricing and lead time decisions for both homogenous and heterogeneous firms our case study provides important managerial insights about firms behavior under price and lead time competition in a semiconductor manufacturing industry

an oligopolistic power market model with tradable no sub x permits models formulated as complementarity problems have been applied previously to assess the potential for market power in transmission constrained electricity markets here we use the complementarity approach to simulate the interaction of pollution permit markets with electricity markets considering forward contracts and the operating reserve market because some power producers are relatively large consumers of permits there could be interaction between market power in the permits and energy markets market power in the energy market is modeled using a cournot game while a conjectured price response model is used in the permits market an illustrative application is made to pennsylvania new jersey maryland interconnection pjm which we represent by a 14 node dc load flow model and the usepa ozone transport commission no sub x budget program the results show that forward contracts effectively mitigate market power in pjm energy market and both simulated solutions of perfect and cournot oligopoly competition are a good approximation to actual prices in 2000 except that the cournot model yielded higher peak prices the no sub x market influences the cournot energy market in several ways one is that cournot competition lowers the price of no sub x permits which in turn affects on low and high emission producers differently in general because pollution permits are an important cost high concentration in the market for such permits can exacerbate the effects of market power in energy markets

purchase allocation and demand bidding in electric power markets the purchase allocation problem is one of the most important problems faced by an electric energy service provider under new market environments the optimal purchase allocation problem for dual electric power markets and demand bid generation are discussed in this paper the price volatility is explicitly considered in purchase allocation problems and the sequential nature is modeled by conditional stochastic characteristics an analytical solution for the optimal allocation is derived with given demand and statistical characteristics of the market prices the method for generating demand bids for purchaser based on market allocation and price forecasting is then developed the numerical simulations for market allocation and bid generation are demonstrated based on the actual data of the u s california power market

application of mechanism design to electric power markets as competition is introduced across the electric power industry around the world market design for the industry is urgently needed to shape its future structure and performance when generator companies compete with one another in a deregulated market they may not be willing to share the information needed to perform an economic dispatch of the generation using game theory this paper designs a new mechanism that achieves efficiency economic dispatch in spite of this information problem in this mechanism when each company acts in the best of its own interests the outcome is efficient the paper demonstrates the merits of the mechanism by simulations including the ieee 14 bus case

an energy brokerage system with emission trading and allocation of cost savings an energy brokerage system can achieve lower emission levels for interconnected electric utilities in a cost effective way the paper presents a linear programming formulation of an energy brokerage system in an operational planning framework emission trading among utilities is envisaged to achieve emission reduction targets the power and emission buy sell quotes for individual utilities are computed and communicated to a central broker the broker determines the power and emission interchange schedule which maximizes the power system savings for all participating utilities the shapley value criterion is proposed for allocation of cost savings among the utilities this criterion reflects the true marginal contribution of a utility to the aggregate system savings and hence is superior to the existing methods of cost savings allocation

congestion influence on bidding strategies in an electricity market much of the research on bidding strategies in an electricity market has focused on idealized situations where participants have limited market power and the transmission system is not constrained yet congestion may act to effectively give a bidder market power and consequently the ability to influence the market clearing price in such a noncompetitive situation the bidding strategies of market participants will change in this paper the electrical power market is modeled as an oligopoly market and the cournot quantity model is applied to the bidding strategy problem the bidding process with congestion management is modeled as a three level optimization problem a statistical methodology is then proposed as a solution for large systems

benefit optimization of centralized and decentralized power systems in a multi utility environment the objective is to examine the theoretical bases for benefit optimization in centralized and decentralized electric power systems in a centralized single control power system cost revenue and profit are used as system performance criteria for benefit optimization and the conditions are compared the results show that conventional cost minimization is not necessarily equivalent to benefit optimization based on other criteria in a decentralized multi utility power system benefit optimization and its allocation are investigated at the unconstrained economic optimum economic optimum with constraints and conditions under which the solution is an economic suboptimum the data from the epri regional systems are used to show practical examples of the benefit allocation with wheeling transactions although some rules are better for society than others there still is not one right answer to determine the rules for benefit optimization

transmission analysis by nash game method this paper describes an open access transmission method for maximizing profits in a power system the proposed method is based on the nash bargaining game for power flow analysis in which each transaction and its optimal price are determined to optimize the interests of individual parties transmission losses are considered by the proposed method and test cases and results are discussed to present the merits of the proposed method

efficient determination of cournot equilibria in electricity markets this paper analyzes the deregulated electricity market using game theory and investigates the properties of cournot equilibrium points a new algorithm for the calculation of the cournot equilibrium of an electricity market in the absence of transmission constraints is presented the algorithm is based on the transformation of the cournot game into a three level decision making scheme with economic signal exchange the algorithm is tested on a hypothetical market in order to demonstrate the effects of market concentration and demand elasticity case studies indicate that the algorithm is very efficient computationally and therefore suitable for use with multi period production scheduling models for the electricity market

sustainable transmission planning in imperfectly competitive electricity industries balancing economic and environmental outcomes abstract we explore the role of a transmission system operator tso that builds a transmission line to accommodate renewable energy in order to lower emissions as required by government policy in contrast to central planning a tso in a deregulated electricity industry can only indirectly influence outcomes through its choice of the transmission line capacity via a bi level model we show that this results in less transmission capacity and with limited emissions control in a perfectly competitive industry vis a vis a benchmark centrally planned system a carbon charge on industry that fully accounts for the cost of pollution damage leads to a perfect alignment of incentives and maximised social welfare only under perfect competition by contrast a carbon charge may actually lower social welfare under a cournot oligopoly as the resulting reduction in consumption facilitates the further exercise of market power

price maker self scheduling in a pool based electricity market a mixed integer lp approach this paper addresses the self scheduling problem faced by a price maker to achieve maximum profit in a pool based electricity market an exact and computationally efficient mixed integer linear programming milp formulation of this problem is presented this formulation models precisely the price maker capability of altering market clearing prices to its own benefits through price quota curves no assumptions are made on the characteristics of the pool and its agents a realistic case study is presented and the results obtained are analyzed in detail

economic criteria for planning transmission investment in restructured electricity markets from an economic perspective a common criterion for assessing the merits of a transmission investment is its impacts on social welfare the underlying assumption in using this criterion is that side payments may be used to distribute the social gains among all market players in reality however since the impacts of an electricity transmission project on different players may vary such side payments are rather difficult to implement this paper focuses on different economic criteria that should be considered when planning electricity transmission investments we propose an electricity transmission investment assessment methodology that is capable of evaluating the economic impacts on the various effected stakeholders and account for strategic responses that could enhance or impede the investment s objectives we formulate transmission planning as an optimization problem under alternative conflicting objectives and investigate the policy implications of divergent expansion plans resulting from the planner s level of anticipation of strategic responses we find that optimal transmission expansion plans may be very sensitive to supply and demand parameters we also show that the transmission investments have significant distributional impact creating acute conflicts of interests among market participants we use a 32 bus representation of the main chilean grid to illustrate our results

building sustainable hybrid organizations the case of commercial microfinance organizations we explore how new types of hybrid organizations organizations that combine institutional logics in unprecedented ways can develop and maintain their hybrid nature in the absence of a ready to w

transmission congestion and competition on power generation expansion generation expansion planning involves decisions on location and capacity of new generation which may lead to adding or relieving congestion in transmission lines and to increasing or reducing competition in deregulated markets generation expansion may encounter congestion in the transmission network by constrained single line flows as well as flowgate transfer capabilities in this paper a model to study the interaction between competition and transmission congestion on power generation expansion is proposed the generation expansion problem is modeled as a cournot competition game network transmission constraints are included in the optimal generation expansion problem to comply with power flow limits results from a five bus power network and the ieee 24 bus system are presented and discussed

linear complementarity models of nash cournot competition in bilateral and poolco power markets two cournot models of imperfect competition among electricity producers are formulated as mixed linear complementarity problems lcps and a simple example is presented to illustrate their application the two models simulate bilateral markets the models include a congestion pricing scheme for transmission but other transmission pricing approaches can also be represented in this framework the two models differ from each other in that one has no arbitrage between nodes of the network while in the other model arbitragers erase any noncost based differences in price the latter bilateral model turns out to be equivalent to a cournot model of a poolco the models differ from other cournot market models in that they include both of kirchhoff s laws via a dc approximation can include arbitragers possess unique solutions and are readily solved by efficient lcp algorithms the key assumption that permits their formulation as lcps is that each producer naively assumes that its output will not affect transmission prices

mill pricing versus spatial price discrimination under bertrand and cournot spatial competition this paper asks two questions about spatial competition first does spatial price discrimination lead to lower prices and higher welfare than mill pricing if firms hold the bertrand conjecture the answer is yes for most values of fixed cost but for the cournot conjecture the opposite is true second does the introduction of space into the oligopoly models of bertrand and cournot change their results the answer is generally no however spatial bertrand prices exceed marginal cost unlike their spaceless counterparts these answers are obtained using models of spatial competition of which the cournot mill pricing models are new in spatial competition significant transport costs and economies of scale bestow market power upon firms this paper addresses two questions about spatial competition first does spatial price discrimination yield lower prices and higher social welfare producer plus consumer surplus than fo b mill pricing under spatial price discrimination differences in the delivered prices charged by a firm bear no necessary relationship to differences in transport costs in contrast a mill pricing firm sets a single price at its plant and customers bear the cost of transport this paper answers this question for the cases in which firms adopt the bertrand or cournot conjectures concerning how rivals will react to price and output changes this question is important because of the superficial appeal of mill pricing which stems from its imitation of the spatial structure of marginal costs the presence of spatial price discrimination by contrast is often considered to be evidence of the presence of market power at least in part for these reasons the us robinson patman antitrust act and great britain s price commission favor mill pricing nevertheless spatial price discrimination remains ubiquitous in the us europe and japan greenhut 1981 the second question is how does the introduction of space into the original oligopoly models of cournot and bertrand change their results cournot

solving three player games by the matrix approach with application to an electric power market in models of imperfect competition of deregulated electricity markets the key task is to find the nash equilibrium ne the approaches for finding the ne have had two major bottlenecks computation of mixed strategy equilibrium and treatment of multiplayer games this paper proposes a payoff matrix approach that resolves these bottlenecks the proposed method can efficiently find a mixed strategy equilibrium in a multiplayer game the formulation of the ne condition for a three player game is introduced and a basic computation scheme of solving nonlinear equalities and checking inequalities is proposed in order to relieve the inevitable burden of searching the subspace of payoffs several techniques are adopted in this paper two example application problems arising from electricity markets and involving a cournot and a bertrand model respectively are investigated for verifying the proposed method the proposed method outperforms a publicly available game theory software for the application problems

a robust linear approach for offering strategy of a hybrid electric energy company this paper presents a new approach for determining the day ahead bidding strategies of a large scale hybrid electric energy company the company has both energy generation and energy retailing businesses in a competitive electricity market demand response programs are also considered in the retail side of the company in order to hedge the risk of participation in wholesale market this paper introduces a max min bilevel mathematical programming with equilibrium constraint model for offering a strategy that manages the risk of uncertain forecasted rivals bids by robust optimization the max min bilevel model is converted to its equivalent single level optimization using karush kuhn tucker optimality conditions the duality theory is utilized to find the equivalent ordinary maximization model of the max min problem strong duality theory and big m method are also used to linearize the final model of offering strategy applicability of the proposed approach is shown by implementing it on the ieee 118 bus test system

nash cournot equilibria in hydrothermal electricity markets a method is presented that allows finding the market clearance prices within a hydrothermal power exchange market that incorporates network constraints an analysis is made of the degree of market power exerted by the various agents the nash cournot equilibrium solution of the market is achieved using the nikaido isoda function which is derived from the profit maximization functions calculated by the generating companies both thermal hydro generation and network constraints are considered in the model with coupling constraints of the hydro units also taken into account the model is applied to the main chilean interconnected power system whose abundant hydro production and existing network bottlenecks make it a valuable suitable case for study the results for pool based and bilateral contract markets highlight the strength of the method and show the contribution of the transmission system and hydro constraints

an empirical study of applied game theory transmission constrained cournot behavior restructured energy markets present opportunities for the exercise of market power meaning market players can potentially maintain prices in excess of competitive prices in this paper we investigate cournot equilibrium in a simple example network we analyze three market players in a transmission constrained system and consider nonconstant marginal cost several scenarios are evaluated that show a pure strategy equilibrium can break down even when a transmission constraint exceeds the value of the unconstrained cournot equilibrium line flow

capacity and energy only markets under high renewable penetration this paper presents a multi nodal intertemporal cournot gaming model with transmission constraints and uses it to simulate energy only and capacity energy market designs in the presence of uncertainties stemming from intermittent renewable power generation both market paradigms are compared to a competitive benchmark in order to determine which one performs better in a concentrated market with significant penetration of wind and solar generation as a specific example the model is applied to the south australian zone of the australian national electricity market nem the simulation results for the time interval 2013 2030 show that the capacity energy market has the potential to induce significant new capacity and push prices much closer to the competitive level in contrast to the current energy only market design