Real-time Pricing in Power Markets: Who Gains?

Anette Boom, Sebastian Schwenen

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

We examine welfare eects 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.
We examine welfare eects 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.

Conference

ConferenceJahrestagung des Vereins für Socialpolitik 2012
LocationGeorg-August-Universität Göttingen
CountryGermany
CityGöttingen
Period09/09/201212/09/2012
Internet address

Keywords

    Cite this

    Boom, A., & Schwenen, S. (2011). Real-time Pricing in Power Markets: Who Gains?. Paper presented at Jahrestagung des Vereins für Socialpolitik 2012, Göttingen, Germany.
    Boom, Anette ; Schwenen, Sebastian. / Real-time Pricing in Power Markets : Who Gains?. Paper presented at Jahrestagung des Vereins für Socialpolitik 2012, Göttingen, Germany.38 p.
    @conference{9a0727bdc8b54af08c75fb95a256c856,
    title = "Real-time Pricing in Power Markets: Who Gains?",
    abstract = "We examine welfare eects 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 Bertrandcase, welfare is the same with all or no consumers on smart meters.",
    keywords = "Electricity, Real-time Pricing, Market Power, Efficiency",
    author = "Anette Boom and Sebastian Schwenen",
    year = "2011",
    language = "English",
    note = "null ; Conference date: 09-09-2012 Through 12-09-2012",
    url = "http://www.uni-goettingen.de/de/325378.html",

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    Boom, A & Schwenen, S 2011, 'Real-time Pricing in Power Markets: Who Gains?' Paper presented at, Göttingen, Germany, 09/09/2012 - 12/09/2012, .

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

    2011. Paper presented at Jahrestagung des Vereins für Socialpolitik 2012, Göttingen, Germany.

    Research output: Contribution to conferencePaperResearchpeer-review

    TY - CONF

    T1 - Real-time Pricing in Power Markets

    T2 - Who Gains?

    AU - Boom,Anette

    AU - Schwenen,Sebastian

    PY - 2011

    Y1 - 2011

    N2 - We examine welfare eects 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 Bertrandcase, welfare is the same with all or no consumers on smart meters.

    AB - We examine welfare eects 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 Bertrandcase, welfare is the same with all or no consumers on smart meters.

    KW - Electricity

    KW - Real-time Pricing

    KW - Market Power

    KW - Efficiency

    M3 - Paper

    ER -

    Boom A, Schwenen S. Real-time Pricing in Power Markets: Who Gains?. 2011. Paper presented at Jahrestagung des Vereins für Socialpolitik 2012, Göttingen, Germany.