IDEAS home Printed from https://ideas.repec.org/p/isu/genres/32440.html
   My bibliography  Save this paper

A Novel Approach for Modeling Deregulated Electricity

Author

Listed:
  • Rubin, Ofir
  • Babcock, Bruce A.

Abstract

The theoretical framework developed in this study allows development of a model of deregulated electricity markets that explains two familiar empirical findings; the existence of forward premiums and price-cost markups in the spot market. This is a significant contribution because electricity forward premiums have been previously explained exclusively by the assumptions of perfect competition and risk-averse behavior while spot markups are generally the outcome of a body of literature assuming oligopolistic competition. Our theoretical framework indicates that a certain premium for forward contracting is required for efficient allocation of generation capacity. However, due to the uniqueness of electricity and the design of deregulated electricity markets this premium might be substantially higher than its optimal level.

Suggested Citation

  • Rubin, Ofir & Babcock, Bruce A., 2011. "A Novel Approach for Modeling Deregulated Electricity," Staff General Research Papers Archive 32440, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:32440
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vahl, Fabrício Peter & Rüther, Ricardo & Casarotto Filho, Nelson, 2013. "The influence of distributed generation penetration levels on energy markets," Energy Policy, Elsevier, vol. 62(C), pages 226-235.
    2. Rubin, Ofir D. & Babcock, Bruce A., 2013. "The impact of expansion of wind power capacity and pricing methods on the efficiency of deregulated electricity markets," Energy, Elsevier, vol. 59(C), pages 676-688.
    3. Pappachen, Abhijith & Peer Fathima, A., 2017. "Critical research areas on load frequency control issues in a deregulated power system: A state-of-the-art-of-review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 163-177.
    4. Ben-Moshe, Ori & Rubin, Ofir D., 2015. "Does wind energy mitigate market power in deregulated electricity markets?," Energy, Elsevier, vol. 85(C), pages 511-521.
    5. Oludamilare Bode Adewuyi & Mikaeel Ahmadi & Isaiah Opeyemi Olaniyi & Tomonobu Senjyu & Temitayo Olayemi Olowu & Paras Mandal, 2019. "Voltage Security-Constrained Optimal Generation Rescheduling for Available Transfer Capacity Enhancement in Deregulated Electricity Markets," Energies, MDPI, vol. 12(22), pages 1-16, November.

    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:isu:genres:32440. 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: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.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.