PESD - Publications Page
Learning about Electricity Market Performance with a Large Share of Renewables from the COVID-19 Lock-Down
We show that the negative demand shock due to the COVID-19 lock-down has reduced net-demand system demand less the amount of energy produced by intermittent renewables and net imports that must be served by controllable generation units. Introducing additional intermittent renewable generation capacity will also reduce the net-demand, which implies the lock-down can provide insights about how electricity markets will perform with a large share of renewable generation capacity.
Measuring the Ability to Exercise Unilateral Market Power in Locational-Pricing Markets: An Application to the Italian Electricity Market
An increasing number of wholesale electricity markets employ locational pricing mechanisms where energy prices account for some or all aspects of the transmission network configuration. A major concern of regulators is that suppliers may have the ability to exercise unilateral market power by impacting the extent to which transmission constraints bind. We extend the residual demand curve as a measure of the ability to exercise unilateral market power from a single price market to residual demand hypersurfaces in locational pricing markets.
We extend the competitive benchmark pricing model of Borenstein et al. (2002) to locational-pricing markets. We further extent this model to account for transmission network security constraints as well as technical constraints on thermal power plants that introduce non-convexities in their operating cost functions. We apply both models to assess the performance of the Italian wholesale electricity market for the year 2018.
Simplified Electricity Market Models with Significant Intermittent Renewable Capacity: Evidence from Italy
Using hourly offer curves for the Italian day-ahead market and the real-time re-dispatch market for the period January 1, 2017 to December 31, 2018, we show how thermal generation unit owners attempt to profit from differences between a simplified day- ahead market design that ignores system security constraints as well as generation unit operating constraints, and real-time system operation where these constraints must be respected.