Estimation of conjectural variation of competitive electricity prices and consumer response
- Purdue Univ., West Lafayette, IN (United States)
This paper reviews major existing models for quantifying competitive electricity pricing strategies. Most of them are game models that assume a set of market behaviors for producers. The competitive producers` behavior is called conjectural variations in economics. Based on observations of the evolving deregulated electricity markets around the world, the paper concludes that none of the existing models can fully explain electricity market power and its impact on prices. One reason is because producers, depending on market conditions, sometimes adopt strategies that violate the assumption of least-cost (i.e., marginal cost) dispatch. Instead, this paper proposes a statistical method for estimating the combined effect of the consumers` responses and the producers` strategies on prices in electricity markets. Market data from the California power exchange (Cal-PX) are used to test the model that produces reasonably good results.
- Research Organization:
- Illinois Inst. of Tech., Chicago, IL (United States)
- OSTI ID:
- 696754
- Report Number(s):
- CONF-990410-PROC.-Vol.2; TRN: IM9946%%139
- Resource Relation:
- Conference: 61. American power conference annual meeting, Chicago, IL (United States), 6-8 Apr 1999; Other Information: PBD: 1999; Related Information: Is Part Of Proceedings of the American power conference: Volume 61-2; McBride, A.E. [ed.]; PB: 485 p.
- Country of Publication:
- United States
- Language:
- English
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