a transmission cost based model to estimate the amount of market integrable wind resources in the pursuit of the large scale integration of wind power production it is imperative to evaluate plausible frictions among the stochastic nature of wind generation electricity markets and the investments in transmission required to accommodate larger amounts of wind if wind producers are made to share the expenses in transmission derived from their integration they may see the doors of electricity markets closed for not being competitive enough this paper presents a model to decide the amount of wind resources that are economically exploitable at a given location from a transmission cost perspective this model accounts for the uncertain character of wind by using a modeling framework based on stochastic optimization simulates market barriers by means of a bi level structure and considers the financial risk of investments in transmission through the conditional value at risk the major features of the proposed model which is efficiently solved using benders decomposition are discussed through an illustrative example

uniqueness of market equilibrium on a network a peak load pricing approach abstract in this paper we establish conditions under which uniqueness of market equilibrium is obtained in a setup where prior to trading of electricity transmission capacities between different market regions are fixed in our setup firms facing fluctuating demand decide on the size and location of production facilities they make production decisions constrained by the invested capacities taking into account that market prices partially reflect scarce transmission capacities between the different market zones for this type of peak load pricing model on a network we state general conditions for existence and uniqueness of the market equilibrium and provide a characterization of equilibrium investment and production the presented analysis covers the cases of perfect competition and monopoly the case of strategic firms is approximated by a conjectural variations approach our result is a prerequisite for analyzing regulatory policy options with computational multilevel equilibrium models since uniqueness of the equilibrium at lower levels is of key importance when solving these models thus our paper contributes to an evolving strand of literature that analyzes regulatory policy based on computational multilevel equilibrium models and aims at taking into account individual objectives of various agents among them not only generators and customers but also e g the regulator deciding on network expansion

alternative models of restructured electricity systems part 1 no market power different equilibrium concepts have been proposed by various authors schweppe et al hogan et al chao and peck wu et al to analyse competitive electricity systems we establish correspondences between these different models through a single framework and provide additional interpretations of these equilibrium concepts this unifying conceptual view also provides a computationally feasible approach to simulate the market it also opens the way to the modeling of some imperfect markets

renewable energy curtailment a case study on today s and tomorrow s congestion management abstract this work aims at contributing to the development of congestion management in power systems facing a strong expansion of renewable electricity generation we address a comparatively new but increasingly important challenge to electricity markets with a uniform price zone renewable curtailment due to grid constraints our goal is to provide a model framework suitable to investigate the impact of expanding the grid operator s flexibility under varying congestion management regimes we aim to expose the limitations of the current regime and to present a favorable alternative for our analysis we develop an optimal power flow program to replicate the current congestion management regime for distribution grids with high penetration of distributed generation in germany furthermore we introduce district heating as additional flexibility option and investigate the impact under different approaches to congestion management our results suggest that introducing additional flexibility while keeping the current congestion management regime bears significant risk to increase the cost of congestion management adjusting the regime to take into account economic criteria as outlined in this work eliminates this risk and grants direct control on the trade off between curtailment and cost

on the long run effects of market splitting why more price zones might decrease welfare in liberalized electricity markets we observe different approaches to congestion management while nodal pricing is implemented in canada and some markets in the united states european markets are split up into a limited number of price zones with uniform prices in order to at least partially realize the benefits of regional price differentiation zonal boundaries often coincide with national borders but some countries are also split into multiple zones in this paper we shed light on possible negative welfare effects of market splitting that arise in a model where investment incentives in new generation capacity are taken into account if zones are misspecified we show that standard approaches to configure price zones on the basis of projected nodal price differences or congested transmission capacity may fail to suggest reasonable zone specifications also an adjustment of available transfer capacities atcs between zones or a switch to flow based market splitting does not ensure positive welfare effects our analysis suggests that a careful and detailed evaluation of the system is needed to ensure a reasonable zone configuration

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

grain versus food a hidden issue in china s food policy debate abstract the paper examines the likely pattern of china s food trade in the future should china s food trade policy be adjusted to accommodate its comparative advantage differing from the common perception that china s overall food sector will follow the path of grain trade and face an ever growing trend of net imports this study has found an evolving pattern of exchanging food for food in china over the last 15 years the pattern is in part characterized by strong export expansion of selected food products such as vegetables and fruits aquatic products etc the economic rationale behind the pattern is examined through a comparison of relative costs among alternative food products in china the policy implications of the study are discussed

the short term mortality consequences of income receipt many studies find that households increase their co nsumption after the receipt of expected income payments a result inconsistent wit h the life cycle permanent income hypothesis consumption can increase adverse healt h events such as traffic accidents heart attacks and strokes in this pape r we examine the short term mortality consequences of income receipt we find that mortality increases following the arrival of monthly social security payments re gular wage payments for military personnel the 2001 tax rebates and alaska permane nt fund dividend payments the increase in short run mortality is large potential ly eliminating some of the protective benefits of additional income

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

bi level game approaches for coordination of generation and transmission expansion planning within a market environment the main purpose of this paper is to develop methodologies for simultaneous generation and transmission expansion planning problem of power networks while investigating interactions between these two important sections in the proposed methodologies a transmission operator to operating under different incentives decides about investment in transmission network while anticipating the outcome of a purely competitive electricity market where several rival generation firms complete with each other to determine operating level of their generators amount of their sales and amount of their investment in generation capacity the proposed methodologies rely on bi level programming models whose upper level model represent the problem of investment in transmission by to and the lower level problems represent market outcomes obtained from clearing the market these bi level models are reduced to mixed integer linear and nonlinear programming using the duality theory and karush kuhn tucker kkt optimality conditions the results of the proposed models are analyzed and compared using two illustrative examples

two price zones for the german electricity market market implications and distributional effects abstract we discuss the implications of two price zones i e one northern and one southern bidding area on the german electricity market in the northern zone continuous increases in capacity with low variable costs cause large regional supply surpluses in the market dispatch while in the southern zone conventional capacity decreases as the spatial imbalance of supply and load is increasing the current single bidding area more often results in technically infeasible market results requiring curative congestion management measures there is an ongoing discussion about the potential effects of introducing bidding zones in germany this paper applies an electricity sector model with network representation to analyze the system implications and the distributional effects of two bidding zones in the german electricity system in 2012 and 2015 results show a modest decrease in cross zonal re dispatch levels particularly in 2015 however overall network congestion and re dispatch levels increase in 2015 and also remain on a high level for two bidding zones results are very sensitive to more than two bidding zones and additional line investments illustrating the challenge to define stable price zones in a dynamic setting with two bidding areas prices in the model results increase in the southern zone and decrease in the northern zone the average price deviation grows from 0 4eur mwh in 2012 to 1 7eur mwh in 2015 with absolute values being significantly higher in hours when price differences occur stakeholders within zones are exposed to the price deviations to a different extent distributional effects are surprisingly small compared to the wholesale price or different network charges

economic externalities in transmission network expansion planning abstract this paper discusses investing in transmission capacity and its link with investing in generation capacity since opportunity costs in transmission and generation capacity are dependent externalities arise when investment decisions are decentralized externalities are market failures which appear when a decision of a particular agent changes another agent s welfare but not vice versa when generation and transmission investment decisions are made separately generation investment introduces negative externalities to transmission planning a centralized multistage stochastic model is formulated for finding the pareto optimal solution of investments in transmission and generation capacity using the model we show some examples of externalities in transmission planning for the ieee 24 bus test system and the peruvian system finally we found that for the peruvian system simultaneous optimal planning of generation and transmission capacity gave significant savings around 585 million which represents 10 of the total cost

transmission expansion planning in electricity markets this paper presents a mixed integer linear programming lp formulation for the long term transmission expansion planning problem in a competitive pool based electricity market to achieve optimal expansion planning while modeling market functioning we define a number of scenarios based on the future demand in the system and we simulate the maximization of the aggregate social welfare investment and operating costs transmission losses and generator offers and demand bids are considered we propose to use a set of metrics to rate the effect of the expansion on the generators demands and the system as a whole the proposed model is applied to the garver six bus system and to the ieee 24 bus reliability test system simulation results can be interpreted in economic terms based on the values of the metrics obtained for different scenarios parameters and topologies

toward fully renewable electric energy systems renewable energy sources are here to stay for a number of important reasons including global warming and the depletion of fossil fuels we explore in this paper how a thermal dominated electric energy system can be transformed into a renewable dominated one this study relies on a stochastic programming model that allows representing the uncertain parameters plaguing such long term planning exercise being the final year of our analysis 2050 we represent the transition from today to 2050 by allowing investment in both production and transmission facilities with the target of achieving a renewable dominated minimum cost system the methodology developed is illustrated using a realistic large scale case study finally policy conclusions are drawn

optimal transmission planning under the mexican new electricity market abstract this paper addresses electricity transmission planning under the new industry and institutional structure of the mexican electricity market which has engaged in a deep reform process after decades of a state owned vertically integrated non competitive closed industry under this new structure characterized by a nodal pricing system and an independent system operator iso we analyze welfare optimal network expansion with two modeling strategies in a first model we propose the use of an incentive price cap mechanism to promote the expansion of mexican networks in a second model we study centrally planned grid expansion in mexico by an iso within a power flow model we carry out comparisons of these models which provide us with hints to evaluate the actual transmission planning process proposed by mexican authorities prodesen we obtain that the prodesen plan appears to be a convergent welfare optimal planning process

reconsidering the european regulation of merchant transmission investment in light of the third energy package the role of dominant generators the regulation of merchant transmission investment mti has become an important issue in the eu electricity sector subsequent to the granting of authorizations by european authorities to five merchant projects britned estlink t heeast west cables norger and recently a merchant line connecting italy and austria the creation of a new agency for the cooperation of energy regulators acer at the eu level which has decision making powers on mti therefore presents a unique opportunity to question and re design the current european policy this paper shows that the recent decisions concerning mti may suffer a strong bias against dominant electricity generators while incumbent transmission system operators tsos or new entrant tsos are generally favored by national regulators and the european commission ec this strategy is misguided as it fails to recognize both the new incentives of generators to develop mti and the conflict of interest between the regulated and non regulated activities of incumbent tsos letting dominant generators undertake mti is indeed generally beneficial as long as potential abuses of dominance are mitigated to deter possible anti competitive effects we propose a new and feasible allocation of regulatory powers based on a clear demarcation between the market monitoring powers of acer and the antitrust powers of the ec 2011 elsevier ltd all rights reserved

iso net surplus collection and allocation in wholesale power markets under lmp this study uses five bus and 30 bus test cases to explore iso net surplus congestion rent collections and allocations in wholesale power markets with grid congestion managed by locational marginal prices lmps price sensitivity of demand and generator learning capabilities are taken as experimental treatment factors a key finding is that conditions resulting in greater generator capacity withholding hence higher and more volatile lmps also result in greater iso net surplus collections that can be substantial in size a key conclusion is that iso net surplus collections should be used pro actively to mitigate the conditions encouraging generator capacity withholding and hence high and volatile lmps rather than to provide ex post support for lmp payment offsets and lmp volatility risk hedging as is currently the norm

the economics of planning electricity transmission to accommodate renewables using two stage optimisation to evaluate flexibility and the cost of disregarding uncertainty abstract aggressive development of renewable electricity sources will require significant expansions in transmission infrastructure we present a stochastic two stage optimisation model that captures the multistage nature of transmission planning under uncertainty and use it to evaluate interregional grid reinforcements in great britain gb in our model a proactive transmission planner makes investment decisions in two time periods each time followed by a market response uncertainty is represented by economic technology and regulatory scenarios and first stage investments must be made before it is known which scenario will occur the model allows us to identify expected cost minimising first stage investments as well as estimate the value of information the cost of ignoring uncertainty and the value of flexibility our results show that ignoring risk in planning transmission for renewables has quantifiable economic consequences and that considering uncertainty can yield decisions that have lower expected costs than traditional deterministic planning methods in the gb case the value of information and cost of disregarding uncertainty in transmission planning were of the same order of magnitude approximately 100 m in present worth terms further the best plan under a risk neutral decision criterion can differ from the best under risk aversion finally a traditional sensitivity analysis based robustness analysis also yields different results than the stochastic model although the former s expected cost is not much higher

renewable electric energy integration quantifying the value of design of markets for international transmission capacity abstract integrating large quantities of variable renewable electricity generation remains a political and operational challenge one of the main obstacles in europe to installing at least 200 gws of power from variable renewable sources is how to deal with the insufficient network capacity and the congestion that will result from new flow patterns we model the current methodology for controlling congestion at international borders and compare its results under varying penetrations of wind power with models that simulate an integrated european network using nodal localised marginal pricing the nodal pricing simulations illustrate that congestion and price patterns vary considerably between wind scenarios and within countries and that a nodal price regime could make better use of existing network capacity introducing substantial operational cost savings and reducing marginal power prices in the majority of european countries

trade wars trade negotiations and applied game theory what is the value of trade negotiations quantitative measures of the value of trade liberalisation generally ignore the strategic aspects of protection policy the traditional approach is to compare welfare levels under the existing structure of protection with welfare levels under some alternative structure of protection such as unilateral or multilateral free trade we add two additional questions first in a non cooperative context are either of these points of comparison consistent with countries adopting best response policies given the policies of other countries second in the context of a cooperative negotiation are either of these points of comparison consistent with the outcome that meets certain plausible criteria for a bargaining process if the answer to either of these questions is no then the traditional approach provides at best an incomplete answer to the original question and could provide a misleading answer a simple example illustrates our basic point consider the game in table i this is a non cooperative game between the united states and ec in which each agent has just two pure strategies to do nothing and keep k the existing structure of protection in place or to abolish a trade barriers on imports from the other agent only the payoffs shown are the annual welfare impact relative to the status quo as measured by the equivalent variation ev in income in billions of i973 u s dollars the values shown are taken from the simulation results of brown and whalley i980 table i 4 p 864 what is the best response of the united states in this context if the ec decides to keep its protection structure the united states does better by also keeping its protection structure intact in other words given that the ec plays k it is a best response for the united states to also play k thus the traditional approach would imply that the united states gains from protection in this case however what is the best response of the united states if the ec decides to abolish its protection structure in this instance the united states does best by also abolishing its protection structure the point here is simply that the welfare cost of protection to the united states depends on what the ec does without saying something about what the ec will do one cannot answer our question vis a vis the united states as it happens in this particular game we

market based generation and transmission planning with uncertainties this paper presents a stochastic coordination of generation and transmission expansion planning model in a competitive electricity market the monte carlo simulation method is applied to consider random outages of generating units and transmission lines as well as inaccuracies in the long term load forecasting the scenario reduction technique is introduced for reducing the computational burden of a large number of planning scenarios the proposed model assumes a capacity payment mechanism and a joint energy and transmission market for investors costs recovery the proposed approach simulates the decision making behavior of individual market participants and the iso it is an iterative process for simulating the interactions among gencos transcos and iso the iterative process might be terminated by the iso based on a pre specified stopping criterion the case studies illustrate the applications of proposed stochastic method in a coordinated generation and transmission planning problem when considering uncertainties

where do all the windmills go influence of the institutional setting on the spatial distribution of renewable energy installation abstract promoting renewable energy sources is one policy response to climate change not only is there currently a debate over the best policy instrument it is also discussed whether the renewable energy production should be expanded centralized at locations with the highest production potential or decentralized close to load it is yet not fully understood what influences the spatial distribution of renewable energy installation i assess the effect of subsidy scheme and market design on the spatial distribution of wind energy installations by comparing a feed in tariffs versus market premiums and b uniform versus nodal pricing the analysis is based on theoretical considerations and using a six node test model that reflects the consumption and renewable resource distribution in several countries and regions the institutional setting has great influence on the spatial distribution and resulting system costs with uniform pricing a market premium only leads to a more decentralized expansion of renewable energy production than a tariff when sites share similar wind conditions spatially more distributed expansion of wind power performs better in terms of total costs and share of wind power in final demand when networks are restricted

a bilevel approach to transmission expansion planning within a market environment we present a bilevel model for transmission expansion planning within a market environment where producers and consumers trade freely electric energy through a pool the target of the transmission planner modeled through the upper level problem is to minimize network investment cost while facilitating energy trading this upper level problem is constrained by a collection of lower level market clearing problems representing pool trading and whose individual objective functions correspond to social welfare using the duality theory the proposed bilevel model is recast as a mixed integer linear programming problem which is solvable using branch and cut solvers detailed results from an illustrative example and a case study are presented and discussed finally some relevant conclusions are drawn

domestic politics foreign interests and international trade policy reply this paper incorporates the foreign interest in the determination of a country s international trade policy into a model of political competition between candidates contesting elective office we envisage foreign and domestic producer interests as expressing political support for a candidate via campaign contributions and candidates as making trade policy pronouncements to maximize political support from producer interests tariffs are divisive but vers are consistent with conciliatory policy positions yielding mutual gain to foreign and domestic interests no candidate has an interest in formulating a trade policy position using a tariff if a ver is a policy option protection in the developed countries has in recent years often taken the form of bilaterally negotiated voluntary export restraints vers rather than the more traditional unilaterally imposed import restrictions the use of voluntary export restraints has been paralleled by interest in the theoretical literature the effects of vers have been compared with tariffs and quotas and vers have been examined in a political economy framework with a view to identifying the gainers and losers from this form of restric

the impact of nearly universal insurance coverage on health care utilization evidence from medicare the onset of medicare eligibility at age 65 leads to sharp changes in the health insurance coverage of the u s population these changes lead to increases in the use of medical services with a pattern of gains across socioeconomic groups that varies by type of service while routine doctor visits increase more for groups that previously lacked insurance hospital admissions for relatively expensive procedures like bypass surgery and joint replacement increase more for previously insured groups that are more likely to have supplementary coverage after 65 reflecting the relative generosity of their combined insurance package under medicare

the politics of 1992 fiscal policy and european integration the internal market in europe will greatly increase the international mobility of resources how will this affect fiscal policy in different countries we consider taxation of capital in a two country model where a democratically chosen government in each country chooses tax policy higher capital mobility changes the politico economic equilibrium in two ways on the one hand it leads to more tax competition between the countries this economic effect tends to lower tax rates in both countries on the other hand it alters voters preferences and makes them elect a different government this political effect offsets the increased tax competition although not completely

what is the value of the option to defer an investment in transmission expansion planning an estimation using real options abstract in deregulated markets transmission expansion planning tep is usually performed by a central network planner seeking to maximize social welfare in doing that the network planner commonly follows a traditional project valuation considering a discounted cash flow dcf methodology although incorporating uncertainty and reliability considerations accordingly once the optimal transmission expansion plan is determined the network planner frequently auctions the needed investments obligating the investor to execute the expansion in the fixed inflexible terms defined in the bidding process a key problem is that dcf does not take into account the responses of the planner when uncertainties are resolved because dcf evaluates the project with the information available today in tep managerial flexibility may be valuable because optimal decisions may change over time with the release of new information transmission investors may want to defer or expand according to such information the aim of this article is to estimate the value of adding some flexibility in tep through real options in particular by means of using a real option approach with binomial trees we study the benefits for a social network planner of having the option to defer some transmission investments our results suggest that incorporating flexibility in tep may increase social welfare

market splitting in germany new evidence from a three stage numerical model of europe abstract with the sharp increase in redispatch measures seen during recent years the importance of an efficient congestion management has increased particularly in germany as the current market design with a single bidding area ignores the physical constraints of the transmission grid there is an ongoing discussion about introducing price zones against this background we develop a three stage approach to model redispatch and market splitting for germany while considering interactions with interconnected countries we identify an increasing spatial imbalance between generation and load and delays in grid extension as being the main drivers for the increase of modeled redispatch volumes from 2012 to 2020 we show that market splitting reduces imminent congestion although results are sensitive to the zonal delimitation and corresponding net transfer capacities the overall welfare effect is negligible but price differences between the bidding areas investigated i e one northern and southern price zone result in considerable distributional effects while consumers in northern germany would benefit producer rents and in particular the value of wind energy would decrease the opposite is true for southern germany we conclude that market splitting constitutes a solution to reduce redispatch measures as long as transmission grid expansion is further delayed

transmission and wind power investment this paper jointly considers wind power investment and transmission reinforcement the proposed model is a mathematical program with equilibrium constraints mpec that seeks to identify the optimal wind projects to be developed and the required network reinforcements under the transmission system operator perspective this mpec seeks to minimize consumer payments and is constrained by investment conditions and the equilibria of the market under different operating conditions an array of subsidies is considered to promote independent wind power investment an example and two case studies illustrate the characteristics of the proposed model

does medicare save lives health insurance characteristics shift at age 65 as most people become eligible for medicare we measure the impacts of these changes on patients who are admitted to hospitals through emergency departments for conditions with similar admission rates on weekdays and weekends the age profiles of admissions and comorbidities for these patients are smooth at age 65 suggesting that the severity of illness is similar on either side of the medicare threshold in contrast the number of procedures performed in hospitals and total list charges exhibit small but statistically significant discontinuities implying that patients over 65 receive more services we estimate a nearly 1 percentage point drop in 7 day mortality for patients at age 65 equivalent to a 20 reduction in deaths for this severely ill patient group the mortality gap persists for at least 9 months after admission

europe 1992 and the western pacific economies the main stimulus to completing the integration of the economies of the european community under the i992 programme has been the ec s relatively slow economic growth during the past two or three decades while japan s share of world gdp has trebled since the early i96os to about one sixth the eci 2 s share has fallen slightly to around one quarter many expect or at least hope that the removal of remaining barriers to movements of goods services people and capital within the ec not only will provide a one off boost to ec output cecchini et al i988 but will set ec incomes on a permanently higher growth path baldwin i989 numerous non europeans worry however that the trade diverting consequences of the ec reforms together with possible enlargements of ec membership and changes in ec preferential trading arrangements will be much more significant than any external trade creation and may make some excluded economies worse off this paper seeks to assess the effects of the ec92 programme and related changes currently underway in europe on the trade and growth prospects of a particularly vulnerable group namely the western pacific economies the next section of the paper explains why the western pacific region defined to include northeast and southeast asia plus australia and new zealand is a natural grouping of economies for considering external effects of european policy changes 2 the subsequent section summarizes the likely effects of those changes on the volume and commodity composition of europe s external trade and hence on the trade and welfare of different western pacific economies the fourth section examines possible responses by that region to these developments and their likely repercussions for europe the paper concludes that while the western pacific economies are likely to respond positively to whatever changes take place in europe welfare there in europe

market based coordination of transmission and generation capacity planning we propose an iso model for coordinating transmission expansion planning with competitive generation capacity planning in electricity markets the purpose of the model is a holistic simulation of generation and transmission capacity expansion in the market environment the solution represents an iterative process for simulating the interactions among gencos transcos and the iso which might be terminated by the iso based on a pre specified stopping criterion the proposed model adopts a joint energy and transmission auction market and a capacity mechanism the joint auction market enables competition to occur among generation and transmission resources the capacity mechanism offers incentives for market participant investments that reflect the locational values of additional capacity transmission capacity expansion decisions are made by merchant transmission lines that recover their capacity investments through transmission marginal pricing and capacity payments transmission network security is reflected in the proposed competitive resource planning model the examples illustrate a coordinated planning of generation and transmission in restructured power systems

health insurance and mortality experimental evidence from taxpayer outreach we evaluate a randomized pilot study in which the irs sent informational letters to 3 9 million taxpayers who paid a tax penalty for lacking health insurance coverage under the affordable care act drawing on administrative data we study the effect of the intervention on taxpayers subsequent health insurance enrollment and mortality we find the intervention led to increased coverage in the two years following treatment and that this additional coverage reduced mortality among middle aged adults over the same time period our results provide the first experimental evidence that health insurance reduces mortality

investment incentives for flexible demand options under different market designs abstract this paper analyzes investment incentives for flexible manufacturing facilities under different market designs we propose a multi stage equilibrium model incorporating endogenous determination of generation capacity investment network expansion and redispatch based on the model introduced by grimm et al 2016 including flexibilization of industrial electricity consumption the model allows to investigate incentives for flexibilization and the impact of flexible industrial electricity consumers on the system an application to the german electricity market reveals that flexible industrial electricity consumption can be profitable for firms if the share of flexible electricity consumers is high price fluctuations are mitigated which lowers the individual cost savings from demand flexibility comparing different market designs positive impacts of flexible electricity demand on the system are observed in both the system optimum and the market equilibrium in scenarios with flexible industrial electricity consumption welfare is considerably higher than in those without this is due to lower electricity costs of industrial consumers but more importantly due to less investment in conventional power generation as well as a reduced transmission network expansion however a comparison of nodal and uniform pricing underlines the importance of regional price signals with respect to an efficient allocation of flexible industrial demand

the economic value of transmission lines and the implications for planning models abstract many connections between economic efficiency regulation the environment and energy markets are evident in the planning for transmission upgrades in an electricity network transmission owners have to make decisions about investing in new assets while facing uncertainty in the generation plans regulatory and environmental constraints and current system endowments in this paper we demonstrate an analytical method for determining the economic value of individual transmission lines in a meshed network by calculating the total welfare effects for the system while many regulators believe that traditional congestion rents provide the correct incentives for investing in transmission upgrades we show that the uncertainty in system conditions breaks down this paradigm the analysis uses an existing security constrained optimal power flow scopf model and a test network to demonstrate how the method can be used to determine the welfare effects of changing the capacity of selected transmission lines the results show that a substantial portion of the economic benefits for an individual line may come from maintaining system reliability when equipment failures occur furthermore these benefits can change dramatically when inherently intermittent sources of renewable generation are added to a network and the changes in benefits are not captured effectively by changes in the expected congestion rents

the oregon health insurance experiment evidence from the first year in 2008 a group of uninsured low income adults in oregon was selected by lottery to be given the chance to apply for medicaid this lottery provides an opportunity to gauge the effects of expanding access to public health insurance on the health care use financial strain and health of low income adults using a randomized controlled design in the year after random assignment the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected we find that in this first year the treatment group had substantively and statistically significantly higher health care utilization including primary and preventive care as well as hospitalizations lower out of pocket medical expenditures and medical debt including fewer bills sent to collection and better self reported physical and mental health than the control group

income receipt and mortality evidence from swedish public sector employees in this paper we study the short run effect of salary receipt on mortality among swedish public sector employees by exploiting variation in paydays across work places we completely control for mortality patterns related to for example public holidays and other special days or events coinciding with paydays and for general within month and within week mortality patterns we find a dramatic increase in mortality on the day that salaries arrive the increase is especially pronounced for younger workers and for deaths due to activity related causes such as heart conditions and strokes the effect is entirely driven by an increase in mortality among low income individuals who are more likely to experience liquidity constraints all things considered our results suggest that an increase in general economic activity on salary receipt is an important cause of the excess mortality

endogenous price zones and investment incentives in electricity markets an application of multilevel optimization with graph partitioning in the course of the energy transition load and supply centers are growing apart in electricity markets worldwide rendering regional price signals even more important to provide adequate locational investment incentives this paper focuses on electricity markets that operate under a zonal pricing market design for a fixed number of zones we endogenously derive the optimal configuration of price zones and available transfer capacities on a network in order to optimally govern investment and production decisions in the long run in a multilevel mixed integer nonlinear model that contains a graph partitioning problem on the first level we determine welfare maximizing price zones and available transfer capacities for a given electricity market and analyze their impact on market outcomes using a generalized benders decomposition approach developed in grimm et al 2019 and a problem tailored scenario clustering for reducing the input data size we are able to solve the model to global optimality even for large instances we apply the approach to the german electricity market as an example to examine the impact of optimal zoning on key performance indicators such as welfare generation mix and locations or electricity prices it turns out that even for a small number of price zones an optimal configuration of zones induces a welfare level that almost approaches the first best

market failures of market coupling and counter trading in europe an illustrative model based discussion the horizontal integration of the energy market and the organization of transmission services remain two open issues in the restructured european electricity sector the coupling of the french belgian and dutch electricity markets the trilateral market in november 2006 was a real success the extension of the system to germany in november 2010 also proceeded smoothly and the intent is to continue with the same market architecture but market coupling is based on a zonal system which has often failed in meshed grids this may cast doubts on what will happen in the future when electricity demand picks up again and wind develops the nodal system has generally been more successful than zonal architectures but its implementation is not currently foreseen in the eu this paper analyzes versions of market coupling that differ by the organization of counter trading while underplayed in current discussions counter trading could become a key element of market coupling as its geographic coverage expands and wind penetrates we simplify matters by assuming away strategic behavior between the energy and counter trading markets and conduct the analysis on a stylized six node example taken from the literature we simulate market coupling for different assumptions of zonal decomposition and coordination of transmission system operators tsos we show that these assumptions matter even in the absence of strategic behavior market coupling can be quite vulnerable to the particular situation on hand countertrading can work well or completely fail and it is not clear beforehand what will prevail our analysis relies on standard economic notions such as social welfare and generalized nash equilibrium but the use of these notions is probably novel the nodal organization is the reference first best scenario different zonal decompositions and degrees of coordination are then studied with respect to this first best solution

impact of network payment schemes on transmission expansion planning with variable renewable generation abstract a large number of studies have dealt with the transmission expansion planning tep problem however few investigations have focused on analyzing the impacts of network payment schemes on network configuration and the benefits losses distribution among the participants in electricity markets in this paper we propose a multi annual transmission expansion planning model considering four different network payment schemes to finance the construction of new transmission lines seeking to reduce the total system costs wind and solar power generation are included in the model taking into account their variability the proposed models are reformulated as mixed integer linear programming milp problems we use seven performance metrics related with congestion nodal prices and generator benefits among others to evaluate the effect of each payment scheme a realistic case study based on the main power system in chile is analyzed to illustrate the proposed models it is shown that integrating line cost recovering equations into the tep model may result into a more realistic and less congested power network also total system cost is highly related with transmission tariff discrimination in that way tariffs with high location dependence perform better in the case studied the chilean power system

the effects of government transfers on monthly cycles in drug abuse hospitalization and mortality this paper analyzes the monthly patterns of adverse outcomes due to the consumption of illegal drugs by recipients of government transfer payments we find evidence that certain subpopulations on government cash aid significantly increase their consumption of drugs when their checks arrive at the beginning of the month and as a result experience adverse events including hospitalization and death using data from california we find that the overall rate of drug related hospital admissions increases abruptly at the beginning of the month with admissions increasing 23 during the first five days of the month we find that this cycle is driven largely by recipients of supplemental security income ssi ssi recipients also experience an abrupt 22 increase in within hospital mortality after receiving their checks these findings suggest that full wallets adversely affect some aid recipients and that policymakers should explore alternate disbursement regimes such as a staggered disbursement schedule or in kind support that have the potential to reduce the rate of adverse events

long term impacts of childhood medicaid expansions on outcomes in adulthood we use administrative data from the internal revenue service to examine long term impacts of childhood medicaid eligibility expansions on outcomes in adulthood at each age from 19 to 28 greater medicaid eligibility increases college enrolment and decreases fertility especially through age 21 starting at age 23 females have higher contemporaneous wage income although male increases are imprecise together both genders have lower mortality these adults collect less from the earned income tax credit and pay more in taxes cumulatively from ages 19 to 28 at a 3 discount rate the federal government recoups 58 cents of each dollar of its investment in childhood medicaid

flexible transmission expansion planning with uncertainties in an electricity market deregulation of the electric power industry has introduced new uncertainties for market participants and made planning of transmission expansion more difficult more flexible transmission expansion plans are needed to cope with the increased risks in this paper a novel planning approach is proposed to meet the above challenge in our approach the planning process is modeled as a mixed integer nonlinear programming minlp problem so that conflicting objectives can be optimized simultaneously to minimize planning risks our method identifies several scenarios based on statistics and expert knowledge the most flexible expansion plan is selected as the plan that has least adaptation cost the proposed method is tested with the ieee 14 bus system promising results are obtained to demonstrate the effectiveness of our method

equilibria in an oligopolistic electricity pool with stepwise offer curves we study the equilibria reached by strategic producers in a pool based network constrained electricity market the behavior of each producer is modeled by a mathematical program with equilibrium constraints mpec whose objective is maximizing profit and whose complementarity constraints describe market clearing the joint solution of all these mpecs constitutes an equilibrium problem with equilibrium constraints epec the equilibria associated with the epec are analyzed by solving the strong stationarity conditions of all mpecs which can be linearized without approximation by mixed integer linear programming milp techniques the resulting mixed integer linear conditions can be reformulated as an optimization problem that allows establishing diverse objectives to differentiate among alternative equilibria

a game theoretic model for generation expansion planning problem formulation and numerical comparisons this paper presents an application of noncooperative game theory to generation expansion planning gep in a competitive electricity industry the authors apply the cournot model of oligopoly behavior to formulate a gep model that may characterize expansion planning in a competitive regime particularly in pool dominated generation supply industries numerical experiments are conducted on a test system to analyze generation investment and market participation decisions of candidate expansion units that vary in costs and forced outage rates the numerical results point to 1 greater industry expansion and system reliability under cournot competition than under centralized expansion planning and 2 higher probabilistic measures of reliability from multi player expansion than from expansion by a traditional monopolist with an equivalent reserve margin requirement furthermore the authors summarize analytical results involving a simplified version of the gep game

a welfare analysis of electricity transmission planning in germany we analyze the electricity transmission planning process in germany netzentwicklungsplan which separates transmission expansion decisions from generation dispatch we employ an economic modeling approach to analyze two different network planning settings in the first setting there is no trade off between transmission network development and generation dispatch as is currently the case in germany a second setting alternatively allows for such a trade off and thus represents a welfare superior way of transmission network planning applications with the two model variants are carried out for the german electricity system in 2035 the results illustrate overinvestment in transmission capacity and decreased welfare associated with the netzentwicklungsplan

national strategic investment in european power transmission capacity abstract the transformation of the european electricity system requires substantial investment in transmission capacity to facilitate cross border trade and to efficiently integrate renewable energy sources however network planning in the eu is still mainly a national prerogative in contrast to other studies aiming to identify the pan european continental welfare optimal transmission expansion we investigate the impact of zonal planners deciding on network investment strategically with the aim of maximizing the sum of consumer surplus generator profits and congestion rents in their jurisdiction this reflects the inadequacy of current mechanisms to compensate for welfare re allocations across national boundaries arising from network upgrades we propose a three stage equilibrium model to describe the nash game between zonal planners i e national governments regulators or system operators each taking into account the impact of network expansion on the electricity spot market and the resulting welfare effects on the constituents within its jurisdiction we propose a novel way to solve the resulting gne epec type problem using a variation of a disjunctive constraints reformulation this allows to solve this problem without a priori assumptions on the relative valuation of shared constraints by each player using a four node sample network we identify several nash equilibria of the game between the zonal planners this example illustrates the failure to reach the first best welfare expansion in the absence of an effective framework for cross border cost benefit allocation

transmission expansion in an oligopoly considering generation investment equilibrium abstract transmission expansion planning tep is a sophisticated decision making problem especially in an oligopolistic electricity market in which a number of strategic price maker producers compete together a transmission system planner who is in charge of making tep decisions requires considering the future generation investment actions however in such an oligopolistic market each producer makes its own strategic generation investment decisions this motivates the transmission system planner to consider the generation investment decision making problem of all producers within its tep model the strategic generation investment problem of each producer can be represented by a complementarity bi level model the joint consideration of all bi level models one per producer characterizes the generation investment equilibrium that identifies the future evolution of generation investment in the market this paper proposes a tri level tep decision making model to be solved by the transmission system planner whose objective is to maximize the social welfare of the market minus the expansion costs and whose constraints are the transmission expansion limits as well as the generation investment equilibrium problem this model is then recast as a mixed integer linear programming problem and solved numerical results from an illustrative example and a case study based on the ieee 14 bus test system demonstrate the usefulness of the proposed approach

uncertain bidding zone configurations the role of expectations for transmission and generation capacity expansion abstract ongoing policy discussions on the reconfiguration of bidding zones in european electricity markets induce uncertainty about the future market design this paper deals with the question of how this uncertainty affects market participants and their long run investment decisions in generation and transmission capacity generalizing the literature on pro active network expansion planning we propose a stochastic multilevel model which incorporates generation capacity investment network expansion and market operation taking into account uncertainty about the future bidding zone configuration using a stylized two node network we disentangle different effects that uncertainty has on market outcomes if there is a possibility that future bidding zone configurations provide improved regional price signals welfare gains materialize even if the change does not actually take place as a consequence welfare gains of an actual change of the bidding zone configuration are substantially lower due to those anticipatory effects additionally we show substantial distributional effects in terms of both expected gains and risks between producers and consumers and between different generation technologies

what did medicare do the initial impact of medicare on mortality and out of pocket medical spending abstract we study the impact of the introduction of one of the major pillars of the social insurance system in the united states the introduction of medicare in 1965 our results suggest that in its first 10 years the establishment of universal health insurance for the elderly had no discernible impact on elderly mortality however we find a substantial reduction in the elderly s exposure to out of pocket medical expenditure risk specifically we estimate that the introduction of medicare was associated with a 40 decline in out of pocket spending for the top quartile of the out of pocket spending distribution a stylized expected utility framework suggests that the welfare gains from such reductions in risk exposure alone may be sufficient to cover almost two fifths of the costs of medicare these findings underscore the importance of considering the direct insurance benefits from public health insurance programs in addition to any indirect benefits from an effect on health

review of grid tie micro generation systems without energy storage towards a new approach to sustainable hybrid energy systems linked to energy efficiency abstract this paper reviews the literature on the subject albeit approaching hybrid micro generation power systems from a systems thinking st and cybernetics standpoint viewing them as dynamically complex adaptive systems cas coupled with and supplying to a set of homes termed a sustainable block in a rural setting here homeostatic regulation hr and control play a vital role in reaching efficient equilibrium towards reconciling power supply and demand response management unlike most of the work reviewed in the literature the focus here is on supervisory control of grid connected micro generation systems without energy storage aiming towards building energy efficiency thriftiness and sustainability in energy consumption building on homeostatic control hc principles first introduced by f c schweppe in 1979 the paper explores the concepts of sustainability and sustainable hybrid energy systems shes applied to micro generation focusing on operational aspects rather than on socio economic environmental or regulatory ones a concrete theoretical model for building a shes is presented for a proposed grid connected renewable microgrid the model seeks to reconcile power supply and demand towards efficient equilibrium homeostasis proposing reward based criteria for controlling renewable electricity supply and consumption in rural communities in chile discussion and recommendations are also offered stating that energy sustainability es is essentially a systems issue and one where es is first and foremost a structural organizational and operational property which is in the very nature of the system itself it is built into it rather than explained by exogenous factors

transmission and generation investment in electricity markets the effects of market splitting and network fee regimes abstract we propose an equilibrium model that allows to analyze the long run impact of the electricity market design on transmission line expansion by the regulator and investment in generation capacity by private firms in liberalized electricity markets the model incorporates investment decisions of the transmission system operator and private firms in expectation of an energy only market and cost based redispatch in different specifications we consider the cases of one vs multiple price zones market splitting and analyze different approaches to recover network cost in particular lump sum generation capacity based and energy based fees in order to compare the outcomes of our multilevel market model with a first best benchmark we also solve the corresponding integrated planner problem using two test networks we illustrate that energy only markets can lead to suboptimal locational decisions for generation capacity and thus imply excessive network expansion market splitting heals these problems only partially these results are valid for all considered types of network tariffs although investment slightly differs across those regimes

market design and investment incentives the purpose of this study was to understand how market design affects market performance through its impact on investment incentives for this purpose we model capacity choices by two ex ante identical firms which compete in the product market we analyse a number of different market design elements including i two commonly used auction formats the uniform price and discriminatory auctions ii price caps and iii bid duration we find that although the discriminatory auction tends to lower prices this does not imply that investment incentives at the margin are poorer indeed aggregate capacity is the same under both auction formats

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

do generation firms in restructured electricity markets have incentives to support social welfare improving transmission investments this paper examines the incentives that generation firms have in restructured electricity markets for supporting long term transmission investments in particular we study whether generation firms which arguably play a dominant role in the restructured electricity markets have the incentives to fund or support incremental social welfare improving transmission investments we examine this question in a two node network and explore how such incentives are affected by the ownership of financial transmission rights ftrs by generation firms in the analyzed two node network we show both i that the net exporter generation firm has the correct incentives to increase the transmission capacity incrementally up to a certain level and ii that although a policy that allocates ftrs to the net exporter generation firm can be desirable from a social point of view such a policy would dilute the net importer generation firm s incentives to support transmission expansion moreover if all ftrs were allocated or auctioned off to the net exporter generation firm then it is possible to increase both consumer surplus and social welfare while keeping the net exporter generation firm revenue neutral

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

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

a transmission planning framework considering future generation expansions in electricity markets this paper proposes a transmission planning framework in a market environment in which only the generation sector is deregulated the proposed framework is based on modeling generation companies gencos strategic behavior and anticipating their expansion patterns from the viewpoint of a transmission system planner the transmission expansion planning problem in this paper is modeled as a four level optimization problem a solution method based on agent based systems and search based optimization techniques is proposed to determine the optimal transmission expansion plan

transmission investment in the peruvian electricity market theory and applications abstract this research presents an application of the mechanism in hogan et al 2010 hrv to promote electricity transmission network expansion in the peruvian electricity transmission system known as sein sistema electrico interconectado nacional the hrv mechanism combines the merchant and regulatory approaches to promote investment into transmission grids this mechanism gives incentives for efficient investment in expansion of the network by rebalancing over time the fixed and variable charges of a two part tariff in the framework of a wholesale electricity market with locational pricing the expansion of the network is carried out through the sale of financial transmission rights ftrs for the congested lines the mechanism is applied for 103 nodes of the sein using detailed characteristics of generators nodes and transmission lines under laspeyres weights and linear cost of expansion of transmission capacity it is shown that prices converge to lower price levels as a result of increased transmission capacity

adverse selection and an individual mandate when theory meets practice we develop a model of selection that incorporates a key element of recent health reforms an individual mandate using data from massachusetts we estimate the parameters of the model in the individual market for health insurance we find that premiums and average costs decreased significantly in response to the individual mandate we find an annual welfare gain of 4 1 per person or 51 1 million annually in massachusetts as a result of the reduction in adverse selection we also find smaller post reform markups

the eu regulation on cross border trade of electricity a two stage equilibrium model the regulation on cross border exchanges of electricity in the european union is meant to enhance the trade of electricity between member states by facilitating access to the network and improving the management of congestion at the interconnections this paper presents a computational model that embeds these two features the problem is cast in the form of a two stage equilibrium between regional regulators in the first stage they decide on the allocation of their regional network costs between generators and customers either they maximise their regional welfare non cooperatively nash equilibrium or they centralise the decision as a super regulator leading to a cooperative equilibrium in the second stage equilibrium the consequences of first stage s decisions are assessed by modelling the energy market as the result of imperfect competition equilibrium on competitive market coupled with regulated pricing on the domestic less competitive markets the rules that come out of the first stage game largely influence the final equilibrium we illustrate this on an extensive numerical example showing that the model behaves properly and identifying policy issues worth of further investigations c 2006 elsevier b v all rights reserved

health insurance eligibility utilization of medical care and child health two economists applied data from the current population survey and the national health interview survey and state level data on child mortality to a simulation model of utilization of medical care that varies only with the states legislative environment to examine the utilization of medical care and health effects of medicaid eligibility on low income children the models took into consideration the recent expansions of medicaid to low income children 38 of those ineligible for medicaid in 1984 who became eligible due to changes during 1984 1992 were uninsured between 1984 and 1992 expansions of the medicaid program increased the proportion of children eligible for medicaid almost two fold 16 1 vs 31 2 yet coverage rates were always lower than eligibility rates 13 2 vs 16 1 in 1984 and 20 3 vs 31 2 in 1992 and the increase in coverage rates was only about 50 of the increase in eligibility rates during 1984 1992 the probability that a child was eligible for medicaid increased the probability of health insurance coverage by 29 77 when the model considered bias in variables e g a recession in a state the take up rate was only 22 73 nevertheless medicaid markedly increased use of medical care for example eligibility for medicaid increased the likelihood of making a visit to a physicians office in the last two weeks by about 50 it also increased the probability of a child visiting the hospital suggesting inefficiency in the way that providers deliver care to medicaid enrollees medicaid eligibility had a significant effect on reducing child mortality the 15 1 percentage point increase in eligibility during 1984 1992 reduced child mortality by 4 5 when the researchers examined parent assessed subjective health measures medicaid eligibility had no effect on child health medicaid eligibility reduced race and education based disparities in the number of visits and racial differences in mortality yet it may actually intensify current disparities in health care delivery site