Composition of Electricity Generation Portfolios, Pivotal Dynamics, and Market Prices
AbstractWe use simulations to study how the diversification of electricity generation portfolios influences wholesale prices. We find that the relationship between technological diversification and market prices is mediated by the supply-to-demand ratio. In each demand case there is a threshold where pivotal dynamics change. Pivotal dynamics pre- and post-threshold are the cause of nonlinearities in the influence of diversification on market prices. The findings are robust to changes in the main market assumptions.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 55 (2009)
Issue (Month): 11 (November)
electricity; market power; simulations; technology diversification;
Other versions of this item:
- Augusto Rupérez-Micola & Albert Banal-Estañol, 2007. "Composition of electricity generation portfolios, pivotal dynamics and market prices," Economics Working Papers 1083, Department of Economics and Business, Universitat Pompeu Fabra.
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