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Separation and Volatility of Locational Marginal Prices in Restructured Wholesale Power Markets

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Author Info
Li, Hongyan
Sun, Junjie
Tesfatsion, Leigh S.

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Abstract

This study uses an agent-based test bed ("AMES") to investigate separation and volatility of locational marginal prices (LMPs) in an ISO-managed restructured wholesale power market operating over an AC transmission grid. Particular attention is focused on the dynamic and cross-sectional response of LMPs to systematic changes in demand-bid price sensitivities and supply-offer price cap levels under varied learning specifications for the generation companies. Also explored is the extent to which the supply offers of the marginal (price-determining) generation companies induce correlations among neighboring LMPs. Related work can be accessed at: http://www.econ.iastate.edu/tesfatsi/AMESMarketHome.htm

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File URL: http://www.econ.iastate.edu/research/webpapers/paper_13075_09009.pdf
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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 13075.

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Length: 34 pages
Date of creation: 09 Jun 2009
Date of revision:
Handle: RePEc:isu:genres:13075

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
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Web page: http://www.econ.iastate.edu
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Related research
Keywords: Restructured wholesale power markets; agent-based modeling; locational marginal prices (LMPs); LMP separation; LMP volatility; multi-agent learning; demand-bid price sensitivity; supply-offer price caps; AMES Wholesale Power Market Test Bed;

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Find related papers by JEL classification:
B4 - Schools of Economic Thought and Methodology - - Economic Methodology
C0 - Mathematical and Quantitative Methods - - General
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
D4 - Microeconomics - - Market Structure and Pricing
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L5 - Industrial Organization - - Regulation and Industrial Policy
Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Somani, Abhishek & Tesfatsion, Leigh S., 2008. "An Agent-Based Test Bed Study of Wholesale Power Market Performance Measures," Staff General Research Papers 12977, Iowa State University, Department of Economics.
  2. Junjie Sun & Leigh Tesfatsion, 2007. "Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework," Computational Economics, Springer, vol. 30(3), pages 291-327, October. [Downloadable!] (restricted)
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  3. Li, Hongyan & Tesfatsion, Leigh S., 2009. "Capacity Withholding in Restructured Wholesale Power Markets: An Agent-Based Test Bed Study," Staff General Research Papers 13070, Iowa State University, Department of Economics.
  4. Paul L. Joskow, 2006. "Markets for Power in the United States: An Interim Assessment," The Energy Journal, International Association for Energy Economics, vol. 27(1), pages 1-36.
    Other versions:
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This page was last updated on 2009-11-21.

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