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Virtual Power Plant Auctions

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Abstract

Since their advent in 2001, virtual power plant (VPP) auctions have been implemented widely. In this paper, we describe the simultaneous ascending-clock auction format that has been used for virtually all VPP auctions to date, elaborating on other design choices that most VPP auctions have had in common as well as discussing a few aspects that have varied significantly among VPP auctions. We then evaluate the various objectives of regulators in requiring VPP auctions, concluding that the auctions have been effective devices for facilitating new entry into electricity markets and for developing wholesale power markets.

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File URL: http://www.cramton.umd.edu/papers2005-2009/ausubel-cramton-virtual-power-plant-auctions.pdf
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Bibliographic Info

Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 09vpp.

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Length: 14 pages
Date of creation: 2009
Date of revision: 2009
Publication status: Published in Utilities Policy, 18, 201-208, 2010
Handle: RePEc:pcc:pccumd:09vpp

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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu

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Keywords: Auctions; electricity auctions; market design; virtual power plant auctions; clock auction; combinatorial auction;

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References

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  1. Lawrence M. Ausubel & Peter Cramton, 2004. "Auctioning Many Divisible Goods," Journal of the European Economic Association, MIT Press, MIT Press, vol. 2(2-3), pages 480-493, 04/05.
  2. Christian Schultz, 2005. "Virtual Capacity and Competition," CESifo Working Paper Series, CESifo Group Munich 1487, CESifo Group Munich.
  3. Lawrence M. Ausubel & Peter Cramton, 1995. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Papers of Peter Cramton, University of Maryland, Department of Economics - Peter Cramton 98wpdr, University of Maryland, Department of Economics - Peter Cramton, revised 22 Jul 2002.
  4. Lawrence M. Ausubel, 2004. "An Efficient Ascending-Bid Auction for Multiple Objects," American Economic Review, American Economic Association, American Economic Association, vol. 94(5), pages 1452-1475, December.
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Cited by:
  1. de Frutos, María-Ángeles & Fabra, Natalia, 2012. "How to allocate forward contracts: The case of electricity markets," European Economic Review, Elsevier, Elsevier, vol. 56(3), pages 451-469.
  2. Peña, Juan Ignacio, 2011. "Las emisiones primarias de energía en el mercado español: valoración de opciones teórica y de mercado/Primary Energy Emissions in the Spanish Market: Theoretical and Market-Based Option Pricing," Estudios de Economía Aplicada, Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 29, pages 617-626, Agosto.
  3. Peter Cramton & Emel Filiz-Ozbay & Erkut Ozbay & Pacharasut Sujarittanonta, 2012. "Discrete clock auctions: an experimental study," Experimental Economics, Springer, Springer, vol. 15(2), pages 309-322, June.
  4. Luiz T. A. Maurer & Luiz A. Barroso, 2011. "Electricity Auctions : An Overview of Efficient Practices," World Bank Publications, The World Bank, number 2346, August.
  5. Federico, Giulio & López, Ángel L., 2013. "Optimal asset divestments with homogeneous products," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 31(1), pages 12-25.
  6. Anna Creti & Jerome Pouyet & María-Eugenia Sanin, 2013. "The NOME law: implications for the French electricity market," Journal of Regulatory Economics, Springer, Springer, vol. 43(2), pages 196-213, April.

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