Real-time Pricing in Power Markets: Who Gains?

Arbeitspapier

We examine welfare e ffects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with final consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price auction to satisfy demand from retailers acting on behalf of subscribed customers and from consumers with real-time meters. Increasing the number of consumers on real-time pricing does not always increase welfare since risk-averse consumers dislike uncertain and high prices arising through market power. In the Bertrand case, welfare is the same with all or no consumers on smart meters.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working paper ; No. 1-2013

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets
• Subject: Electricity ; Real-time Pricing ; Market Power ; Efficiency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Boom, Anette ; Schwenen, Sebastian
• Event: Veröffentlichung
• (who): Copenhagen Business School (CBS), Department of Economics
• (where): Frederiksberg
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/208574
• Last update: 10.03.2025, 11:41 AM CET