Real-time Pricing in Power Markets

Who Gains?

Anette Boom, Sebastian Schwenen

Publikation: Working paperForskning

Resumé

We examine welfare e ffects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with final consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price auction to satisfy demand from retailers acting on behalf of subscribed customers and from consumers with real-time meters. Increasing the number of consumers on real-time pricing does not always increase welfare since risk-averse consumers dislike uncertain and high prices arising through market power. In the Bertrand case, welfare is the same with all or no consumers on smart meters.
OriginalsprogEngelsk
Udgivelses stedFrederiksberg
UdgiverCopenhagen Business School, CBS
Antal sider38
StatusUdgivet - 2013
NavnWorking Paper / Department of Economics. Copenhagen Business School
Nummer1-2013

Emneord

  • Electricity
  • Real-time Pricing
  • Market power
  • Efficiency

Citer dette

Boom, A., & Schwenen, S. (2013). Real-time Pricing in Power Markets: Who Gains? Frederiksberg: Copenhagen Business School, CBS. Working Paper / Department of Economics. Copenhagen Business School, Nr. 1-2013
Boom, Anette ; Schwenen, Sebastian. / Real-time Pricing in Power Markets : Who Gains?. Frederiksberg : Copenhagen Business School, CBS, 2013. (Working Paper / Department of Economics. Copenhagen Business School; Nr. 1-2013).
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Boom, A & Schwenen, S 2013 'Real-time Pricing in Power Markets: Who Gains?' Copenhagen Business School, CBS, Frederiksberg.

Real-time Pricing in Power Markets : Who Gains? / Boom, Anette; Schwenen, Sebastian.

Frederiksberg : Copenhagen Business School, CBS, 2013.

Publikation: Working paperForskning

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N2 - We examine welfare e ects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with nal consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price auction to satisfy demand from retailers acting on behalf of subscribed customers and from consumers with real-time meters. Increasing the number of consumers on real-time pricing does not always increase welfare since risk-averse consumers dislike uncertain and high prices arising through market power. In the Bertrand case, welfare is the same with all or no consumers on smart meters.

AB - We examine welfare e ects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with nal consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price auction to satisfy demand from retailers acting on behalf of subscribed customers and from consumers with real-time meters. Increasing the number of consumers on real-time pricing does not always increase welfare since risk-averse consumers dislike uncertain and high prices arising through market power. In the Bertrand case, welfare is the same with all or no consumers on smart meters.

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KW - Market power

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Boom A, Schwenen S. Real-time Pricing in Power Markets: Who Gains? Frederiksberg: Copenhagen Business School, CBS. 2013.