Spot market

Abstract: Preface. 1. Introduction. 1. Why Competition? 2. Dramatis Personae. 3. Models of Competition. 4. Open Questions. 5. Further Reading. 6. Problems. 2. Basic Concepts from Economics. 1. Introduction. 2. Fundamentals of Markets. 3. Concepts from the Theory of the Firm. 4. Types of Markets. 5. Markets with Imperfect Competition. 6. Further Reading. 7. Problems. 3. Markets for Electrical Energy. 1. Introduction. 2. What is the Difference between a Megawatt--hour and a Barrel of Oil? 3. The Need for a Managed Spot Market. 4. Open Electrical Energy Markets. 5. The Managed Spot Market. 6. The Settlement Process. 7. Further Reading. 8. Problems. 4. Participating in Markets for Electrical Energy. 1. Introduction. 2. The Consumer's Perspective. 3. The Producer's Perspective. 4. Perspective of Plants with Very Low Marginal Costs. 5. The Hybrid Participant's Perspective. 6. Further Reading. 7. Problems. 5. System Security and Ancillary Services. 1. Introduction. 2. Describing the needs. 3. Obtaining Ancillary Services. 4. Buying Ancillary Services. 5. Selling Ancillary Services. 6. Further Reading. 7. Problems. 6. Transmission Networks and Electricity Markets. 1. Introduction. 2. Decentralized Trading over a Transmission Network. 3. Centralized Trading over a Transmission Network. 4. Further Reading. 5. Problems. 7. Investing in Generation. 1. Introduction. 2. Generation Capacity from an Investor's Perspective. 3. Generation Capacity from a Customer's Perspective. 4. Further Reading. 5. Problems. 8. Investing in Transmission. 1. Introduction. 2. The Nature of the Transmission Business. 3. Cost--based Transmission Expansion. 4. Value--based Transmission Expansion. 5. Further Reading. 6. Problems. Appendix: Answers to Selected Problems. Abbreviations and Acronyms. Index.

Abstract: The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.

Abstract: Our empirical investigation confirms the common belief that retail gasoline prices react more quickly to increases in crude oil prices than to decreases. Nearly all of the response to a crude oil price increase shows up in the pump price within 4 weeks, while decreases are passed along gradually over 8 weeks. The asymmetry could indicate market power of some producers or distributors, or it could result from inventory adjustment costs. By analyzing price transmission at different points in the distribution chain we investigate these theories. We find that some asymmetry occurs at the level of the competitive spot market for gasoline, perhaps reflecting inventory costs. Wholesale gasoline prices, however, exhibit no asymmetry in responding to crude oil price changes, indicating that refiners who set wholesale prices are not the source of the asymmetry. The most significant asymmetry appears in the response of retail prices to wholesale price changes. We argue that this probably reflects short run market power among retail gasoline sellers.

Abstract: We analyze repeated moral hazard with discounting in a competitive credit market with risk neutrality. Even without learning or risk aversion, long-term bank-borrower relationships are welfare enhancing. The main result is that the borrower obtains an infinite sequence of unsecured loans at below spot market cost following the first good project realization. This contract produces first-best action choices. Prior to this stage, the borrower gets secured loans with above-market borrowing cost. The optimal contract thus displays a "selective memory" feature, taking only one of two forms at any given point in time, depending on prior history. We consider an infinitely repeated bank-borrower relationship with moral hazard and universal risk neutrality, and explore the ramifications of credit contract duration when the two well-known benefits of long-term contracting-learning and improved risk sharing-are absent. Our objectives are twofold. The first is to analyze an infinitely repeated game with discounting in a credit market context. We thus relate the theory of repeated games to financial intermediation theory, particularly to issues of moral hazard and collateral-related distortions. The second objective is to understand noteworthy stylized facts of credit markets, such as durability in credit relationships, lower borrowing costs for established borrowers, and unsecured loans for established borrowers versus secured loans for newer borrowers. While these practices may be partly due to learning, we show that learning is not essential to rationalize them. Even if information decays rapidly and banks learn nothing about borrowers through time, these aspects of credit contracting arise in a repeated-game context. Our main results are as follows. First, despite universal risk neutrality and the absence of learning, a durable bank relationship benefits the borrower.2 The intuition is that the long-term contracting permitted by a durable relationship enables the bank to efficiently tax and subsidize the borrower through time to reduce the use of (costly) collateral. Second, the average welfare loss (due to moral hazard) per period is positive even as the time horizon goes to infinity. Third, the optimal infinite-horizon contract has the striking property that, following the period

Abstract: One of the main characteristics of wind power is the inherent variability and unpredictability of the generation source, even in the short-term. To cope with this drawback, hydro pumped-storage units have been proposed in the literature as a good complement to wind generation due to their ability to manage positive and negative energy imbalances over time. This paper investigates the combined optimization of a wind farm and a pumped-storage facility from the point of view of a generation company in a market environment. The optimization model is formulated as a two-stage stochastic programming problem with two random parameters: market prices and wind generation. The optimal bids for the day-ahead spot market are the ldquohere and nowrdquo decisions while the optimal operation of the facilities are the recourse variables. A joint configuration is modeled and compared with an uncoordinated operation. A realistic example case is presented where the developed models are tested with satisfactory results.