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The Effect of UI Regulation on the Electricity Market

Author

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  • Kaushal Kishore

    (Brainmatics Solutions Pvt. Ltd, kishore@brainmatics.net)

Abstract

We studied a scenario where two electricity generators compete with each other in the presence of forward market. We find that if generators are restricted to sell a fraction less than half of their total supply in the spot market, then the price of electricity falls and supply increases. Generators have to sell more in the forward market to sell electricity in the spot market; hence, they have less incentive to restrict the supply in the forward market to sell electricity at higher price in the spot market.

Suggested Citation

  • Kaushal Kishore, 2011. "The Effect of UI Regulation on the Electricity Market," Journal of Infrastructure Development, India Development Foundation, vol. 3(1), pages 91-96, June.
    • Handle: RePEc:sae:jouinf:v:3:y:2011:i:1:p:91-96
    DOI: 10.1177/097493061100300104
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    References listed on IDEAS

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    1. Joshua S. Gans & Danny Price & Kim Woods, 1998. "Contracts and Electricity Pool Prices," Australian Journal of Management, Australian School of Business, vol. 23(1), pages 83-96, June.
    2. Severin Borenstein & James B. Bushnell & Frank A. Wolak, 2002. "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," American Economic Review, American Economic Association, vol. 92(5), pages 1376-1405, December.
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