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A Comparison of Electricity Market Designs in Networks

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  • Andreas Ehrenmann

    (Judge Institute of Management, University of Cambridge)

  • Karsten Neuhoff

    (Department of Applied Economics, University of Cambridge)

Abstract

In the real world two classes of market designs are implemented to trade electricity in transmission constrained networks. Analytical results show that in two node networks integrated market designs reduce the ability of electricity generators to exercise market power relative to separated market designs. In multi node networks countervailing effects make an analytic analysis difficult. We present a formulation of both market designs as an equilibrium problem with equilibrium constraints. We find that in a realistic network, prices are lower with the integrated market design.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Andreas Ehrenmann & Karsten Neuhoff, 2003. "A Comparison of Electricity Market Designs in Networks," Working Papers EP31, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:ep31
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