Abstract
We examine welfare effects 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.
| Original language | English |
|---|---|
| Publication date | 2018 |
| Number of pages | 39 |
| Publication status | Published - 2018 |
| Event | VII International Academic Symposium: Smart Energy Systems from a New Energy Policy Approach - Parc Científic de Barcelona, Barcelona, Spain Duration: 5 Feb 2019 → 5 Feb 2019 Conference number: 7 https://ieb.ub.edu/en/event/vii-international-academic-symposium/ |
Conference
| Conference | VII International Academic Symposium |
|---|---|
| Number | 7 |
| Location | Parc Científic de Barcelona |
| Country/Territory | Spain |
| City | Barcelona |
| Period | 05/02/2019 → 05/02/2019 |
| Internet address |
Keywords
- Electricity
- Real-time pricing
- Market power
- Efficiency
