Playing the pool: Can everybody win?

Journal Article · Fri Mar 01 04:00:00 EST 1996 · Fortnightly

OSTI ID:245488

Grow, R D

Generators can bid at variable cost, but without a capacity payment they all lose money. The answer? Demandside bidding. As electric restructuring spreads around the nation and the world, the idea of a {open_quotes}PoolCo{close_quotes} spot market (pool) gains credence. Pools already exist in England, Australia, Norway, Alberta, and Argentina. On December 20, the California Public Utilities Commission formally proposed a pool, called the California Power Exchange, to begin operation as of January 1, 1998. Still, questions remain. Can a pool adequately compensate all the generators that the market needs, or provide correct price signals for market entry? To some, this question may appear trivial. After all, generators can raise prices until they receive adequate compensation, and new generators will come in if prices are high enough. If a pool works as intended, generators will have an incentive to bid their short-run variable costs. The assumption is made here that generators will in fact bid at short-run variable cost. From there, examples test whether a pool can provide an adequate power supply, compensate generators fairly, and give correct signals for adding new capacity.

• OSTI ID: 245488
• Journal Information: Fortnightly, Journal Name: Fortnightly Journal Issue: 5 Vol. 134; ISSN FRTNE8
• Country of Publication: United States
• Language: English

Related Subjects

24 POWER TRANSMISSION AND DISTRIBUTION
29 ENERGY PLANNING, POLICY, AND ECONOMY
DEREGULATION
ELECTRIC POWER
ELECTRIC POWER INDUSTRY
MANAGEMENT
POWER DISTRIBUTION SYSTEMS
PROPOSALS