IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201101010800001247.html
   My bibliography  Save this paper

ISO Net Surplus Collection and Allocation in Wholesale Power Markets Under LMP

Author

Listed:
  • Li, Hongyan
  • Tesfatsion, Leigh

Abstract

This study uses five-bus and 30-bus test cases to explore ISO net surplus (congestion rent) collections and allocations in wholesale power markets with grid congestion managed by locational marginal prices (LMPs). Price-sensitivity of demand and generator learning capabilities are taken as experimental treatment factors. A key finding is that conditions resulting in greater generator capacity withholding, hence higher and more volatile LMPs, also result in greater ISO net surplus collections that can be substantial in size. A key conclusion is that ISO net surplus collections should be used pro-actively to mitigate the conditions encouraging generator capacity withholding and hence high and volatile LMPs rather than to provide ex post support for LMP payment offsets and LMP volatility risk hedging as is currently the norm.

Suggested Citation

  • Li, Hongyan & Tesfatsion, Leigh, 2011. "ISO Net Surplus Collection and Allocation in Wholesale Power Markets Under LMP," ISU General Staff Papers 201101010800001247, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201101010800001247
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/944fa370-a6e8-461d-8c31-a8e2f2139a3e/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    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:isu:genstf:201101010800001247. 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.