Auction performance on wholesale electricity markets in the presence of transmission constraints and transmission costs

Arbeitspapier

Electricity markets are becoming more integrated around the world. However, the knowledge of the effects of different auction formats on suppliers' strategies in the presence of transmission constraints and transmission costs is still very limited. In this paper, I analyze the performance of uniform and discriminatory price auctions in the presence of transmission constraints and transmission costs. When the transmission capacity is binding, the discriminatory price auction could outperform the uniform price auction, minimizing the equilibrium price and the transmission costs. Moreover, when the transmission capacity is binding, an increase in transmission costs could be pro-competitive when the auction is discriminatory, but not when the auction is uniform.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 1098

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Oligopoly and Other Imperfect Markets ; Electric Utilities
• Subject: electricity auctions ; transmission constraint ; transmission costs ; market design

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Blazquez de Paz, Mario
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/129652
• Last update: 10.03.2025, 11:43 AM CET