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From a bundled energy-capacity pricing model to an energy-capacity-ancillary services pricing model

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  • Raineri, Ricardo
  • Arce, Raúl
  • Ri­os, Sebastián
  • Salamanca, Carlos

Abstract

In this paper, we extend the Chilean power generation pricing mechanism, with capacity and energy payments, to one where ancillary services (AS), as frequency regulation and voltage control, are explicitly recognized. Adequacy and security attributes of the electric system and the public good characteristics of AS are set within the payment structure to distribute the financing of AS among those who benefit from their provision. The contribution to finance the provision of AS is determined assessing the value assigned to the system security by each agent, following what's an efficient pricing mechanism in the presence of public goods.

Suggested Citation

  • Raineri, Ricardo & Arce, Raúl & Ri­os, Sebastián & Salamanca, Carlos, 2008. "From a bundled energy-capacity pricing model to an energy-capacity-ancillary services pricing model," Energy Policy, Elsevier, vol. 36(8), pages 2868-2876, August.
    • Handle: RePEc:eee:enepol:v:36:y:2008:i:8:p:2868-2876
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    References listed on IDEAS

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    5. Eric Hirst & Brendan Kirby, 1998. "Simulating the Operation of Markets for Bulk-Power Ancillary Services," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 49-68.
    6. Ricardo Raineri, 2006. "Global corporate governance and takeovers in electric utilities: the case of ENERSIS, ENDESA and DUKE Energy," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 26(1/2), pages 170-212.
    7. Raineri, R. & Rios, S. & Schiele, D., 2006. "Technical and economic aspects of ancillary services markets in the electric power industry: an international comparison," Energy Policy, Elsevier, vol. 34(13), pages 1540-1555, September.
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    Cited by:

    1. Kumar, T. Bharath & Singh, Anoop, 2021. "Ancillary services in the Indian power sector – A look at recent developments and prospects," Energy Policy, Elsevier, vol. 149(C).

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