·
RICHARD
O'NEILL,
Federal Energy Regulatory Commission,
USA
Title:
Toward A Complete Market Design Improving Efficiency
and Reliability of Electricity Markets.
Abstract:
Electricity markets have evolved without price
responsive demand and have become highly interconnected.
The lack of demand response that requires reliability
rules remains the central problem facing these markets.
Externalities including the laws of physics, business
stealing, pollution and blackouts abound. The policy
question is how should the markets be organized? The
vertically integrated utility internalizes some of the
externalities but creates efficient incentive problems
and usually introduces rate regulation. The other
extreme is a relatively unregulated market. The middle
ground is an exchange with rules and regulations that
prevent market power and promote efficiency. Market
design itself is a cooperative game while the market is
a non-cooperative game. Historically, electricity market
models have generally been circumscribed by hardware and
software capabilities. Modeling simplifications include
energy only, DC only, oversimplified topologies, DC only
and large time steps. Simplifications create ‘missing
commodities’ including reactive power, reserves (real
and reactive) and other ancillary services. In this
paper we present a complete market design where all
scarce commodities are simultaneously priced and cleared
over both space and time using a full MIP ACOPF with all
assets as active market participants. The market design
allows combinatorial marginal cost bidding restrained by
budget constraints, produces a Walrasian equilibrium
with nonconfiscatory settlements and simultaneously
clears of all products. If different models are used for
different time horizons, compatibility is important.
· YVES
SMEERS,
Université Catholique de Louvain,
Belgium
Title:
How well can one measure market power in
restructured electricity systems?.
Abstract:
The integration of national electricity systems into a
single internal European electricity market is not
progressing well with the result that the level of
competition in the sector remains unsatisfactory. This
had led to proposals to apply ex ante remedies that
directly bear on the structure of national incumbents.
These measures involve quantitative recommendations such
as virtual auctioning of capacity or divestitures that
increase the number of competing firms. The evaluation
of these measures partly relies on computable oligopoly
models of the restructured electricity sector. This
paper analyses the recent literature of these models and
concludes that they are not currently capable of
providing the degree of legal and regulatory certainty
that the importance of these ex ante remedies requires.
The state of the art in these models is such that their
results reflect more a set of non-testable assumptions
than observed facts or unambiguous theory. More academic
work is necessary before these models can be applied in
a legal or regulatory context. The conclusion is that
this work on the structure of national electricity
market distracts from the fundamental objective to
introduce competition in the power sector by integrating
the national markets into a single electricity market.
