Derivation of locational marginal prices for restructured wholesale power markets

Separation and Volatility of Locational Marginal Prices in Restructured Wholesale Power Markets

This study uses an agent-based test bed (“AMES”) to investigate separation and volatility of locational marginal prices (LMPs) in an ISO-managed restructured wholesale power market operating over an AC transmission grid. Particular attention is focused on the dynamic and cross-sectional response of LMPs to systematic changes in demand-bid price sensitivities and supply-offer price cap levels un...

ISO Net Surplus Extraction in Restructured Wholesale Power Markets

This study uses dynamic 5-bus and 30-bus test cases to explore the net surplus (congestion rents) collected and redistributed by ISOs in restructured wholesale power markets with grid congestion managed by locational marginal pricing. The price-sensitivity of demand and the learning capabilities of generators are taken as treatment factors. A key finding is that ISO net surplus substantially in...

Demand Management in Restructured Wholesale Electricity Markets

Using EPECs to Model Bilevel Games in Restructured Electricity Markets with Locational Prices

We study a bilevel noncooperative game-theoretic model of restructured electricity markets, with locational marginal prices. Each player in this game faces a bilevel optimization problem that we model as a mathematical program with equilibrium constraints, MPEC. The corresponding game is an example of an equilibrium problem with equilibrium constraints, EPEC. We establish sufficient conditions ...

Sticky prices, inventories, and market power in wholesale gasoline markets

A model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks. Unlike explanations that rely upon menu costs, imperfect information, or long-term buyer/seller relationships, this model also predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to ...