Perfect Competition vs. Riskaverse Agents: Technology Portfolio Choice in Electricity Markets

Arbeitspapier

Investments in power generation assets are risky due to high construction costs and long asset lifetimes. Technology diversification in generation portfolios represents one option to reduce long-term investment risks for risk-averse decision makers. In this article, we analyze the impact of market imperfections induced by risk-aversion on the long-term investment portfolio structure in the market. We show that risk-averse electricity market agents who receive a managerial profit share may shift the technology structure in the market significantly away from the welfare optimum. A numerical example provides estimates on the potential scale of this effect and discusses sensitivities of key parameters.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: EWL Working Paper ; No. 03/13

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Portfolio Choice; Investment Decisions ; Electric Utilities ; Energy and the Macroeconomy ; Neural Networks and Related Topics
• Thema: Nodal Pricing ; Market Design ; Electricity Markets

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Sunderkötter, Malte ; Ziegler, Daniel
• Ereignis: Veröffentlichung
• (wer): University of Duisburg-Essen, Chair for Management Science and Energy Economics
• (wo): Essen
• (wann): 2013

Weitere Informationen

• Handle: http://hdl.handle.net/10419/103292
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ