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.
Original languageEnglish
Publication date2011
Number of pages38
Publication statusPublished - 2011
EventThe 10th Annual International Industrial Organization Conference. IIOC 2012 - George Mason University School of Law, Arlington, Virginia, United States
Duration: 16 Mar 201218 Mar 2012
Conference number: 10
http://editorialexpress.com/conference/IIOC2012/program/IIOC2012.html

Conference

ConferenceThe 10th Annual International Industrial Organization Conference. IIOC 2012
Number10
LocationGeorge Mason University School of Law
CountryUnited States
CityArlington, Virginia
Period16/03/201218/03/2012
Internet address

Cite this

Boom, A., & Schwenen, S. (2011). Real-time Pricing in Power Markets: Who Gains?. Paper presented at The 10th Annual International Industrial Organization Conference. IIOC 2012, Arlington, Virginia, United States.
Boom, Anette ; Schwenen, Sebastian. / Real-time Pricing in Power Markets : Who Gains?. Paper presented at The 10th Annual International Industrial Organization Conference. IIOC 2012, Arlington, Virginia, United States.38 p.
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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.",
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Boom, A & Schwenen, S 2011, 'Real-time Pricing in Power Markets: Who Gains?' Paper presented at, Arlington, Virginia, United States, 16/03/2012 - 18/03/2012, .

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

2011. Paper presented at The 10th Annual International Industrial Organization Conference. IIOC 2012, Arlington, Virginia, United States.

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 The 10th Annual International Industrial Organization Conference. IIOC 2012, Arlington, Virginia, United States.