IDEAS home Printed from https://ideas.repec.org/p/aap/wpaper/006.html
   My bibliography  Save this paper

Quantity-before-Price Auction: Evaluating the Performance of the Brazilian Existing Energy Market

Author

Listed:
  • Rodrigo Moita
  • Leonardo Rezende

Abstract

In this paper we study the outcome of the six first “existing energy” auctions in Brazil. Under the current regulatory regime, the bulk of the trade between existing generators and distribution companies is done through bilateral eight-year contracts, negotiated in auctions organized by the regulatory agency. These so-called existing energy auctions follow a specific rule that we call quantity-before-price auction. In this paper we develop an auction model to study this type of game and take the model to the data. The structural model enables us to estimate the opportunity cost of selling energy for each generator, which is the price they expect to obtain in the free market in the future. We find that, while auction prices have steadily risen, the opportunity cost has increased even faster over time, indicating that the generators anticipate a faster increase in energy prices than what is measured by auction prices.

Suggested Citation

  • Rodrigo Moita & Leonardo Rezende, 2008. "Quantity-before-Price Auction: Evaluating the Performance of the Brazilian Existing Energy Market," Business and Economics Working Papers 006, Unidade de Negocios e Economia, Insper.
    • Handle: RePEc:aap:wpaper:006
    as

    Download full text from publisher

    File URL: https://repositorio.insper.edu.br/handle/11224/5852
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aap:wpaper:006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca Telles (email available below). General contact details of provider: https://edirc.repec.org/data/inspebr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.