Price Spikes in Electricity Markets: A Strategic Perspective
AbstractThis paper aims to analyze the issue of price spikes in electricity markets through the lens of noncooperative game theory. The case we consider is Australia’s long established National Electricity Market (NEM). Specifically, we adapt von der Fehr and Harbord’s multi-unit auction model to settings that more closely reflect the structure of the NEM, showing that price spikes can be related to a specifiable threshold in demand.
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Bibliographic InfoPaper provided by School of Economics, University of Queensland, Australia in its series Energy Economics and Management Group Working Papers with number 05.
Date of creation: Dec 2010
Date of revision:
Electricity Markets; Spot Price Behaviour; Non-Cooperative Game Theory.;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-ENE-2010-12-23 (Energy Economics)
- NEP-GTH-2010-12-23 (Game Theory)
- NEP-IND-2010-12-23 (Industrial Organization)
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