Cycles in competitive electricity markets: a simulation study of the western United States

Ford, Andrew

doi:10.1016/s0301-4215(99)00050-6

Cited by 130 publications

(60 citation statements)

References 13 publications

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“…Nevertheless, if the market does not clear, it may be necessary to institute a price cap to protect consumers against overcharging (e.g., Ford, 1999;Hobbs et al, 2001c;Stoft, 2002). If consumers are not involved in real-time price setting, they may otherwise find themselves paying more for electricity than their value of lost load.…”

Section: Introductionmentioning

confidence: 99%

The Question of Generation Adequacy in Liberalised Electricity Markets

Vries

Hakvoort

2004

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in The Question of Generation Adequacy in Liberalised Electricity Markets SummaryThis paper presents an overview of the reasons why unregulated markets for the production of electricity cannot be expected to invest sufficiently in generation capacity on a continuous basis. Although it can be shown that periodic price spikes should provide generation companies with sufficient investment incentives in theory, there are a number of probable causes of market failure. A likely result is the development of investment cycles that may affect the adequacy of capacity. The experience in California shows the great social costs associated with an episode of scarce generation capacity. Another disadvantage is that generation companies can manipulate price spikes. This would result in large transfers of income from consumers to producers and reduce the operational reliability of electricity supply during these price spikes. We end this paper by outlining several methods that have been proposed to stabilise the market, which provide better incentives to generation companies and consumers alike.

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Section: Introductionmentioning

confidence: 99%

The Question of Generation Adequacy in Liberalised Electricity Markets

Vries

Hakvoort

2004

SSRN Journal

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“…When evaluating modelling alternatives for policy support, the literature provides foundations to carry it out using simulation and system dynamics. On the one hand, Bunn and Dyner (1996), Larsen and Bunn (1999), Ford (1999) and Dyner (2000) state that system dynamics may be a sensible option, especially if operating under rapidly evolving systems or under recently restructured markets. Furthermore, Morecroft (1983) argues that system dynamics implicitly uses bounded rationality frameworks, and that the behaviour of complex organizations can only be understood by taking into account the knowledge of individuals and their psychological limitations.…”

Section: Modelling Consumers' Decision Making In Electricity Marketsmentioning

confidence: 99%

Consumers' bounded rationality: the case of competitive energy markets

Dyner

Franco

2004

Syst. Res.

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The recent liberalization of the energy industry provides a challenge for understanding the decision-making processes of the agents involved in their markets. In this new environment, it is of particular interest to investigate consumers' decisions with respect to energy efficiency for a range of purposes that include the assessment of government policy and traders' strategy intents. The neo-classic methodologies reported in the literature generally make strong, and not evident, assumptions with respect to the decision-making processes of end-users, including: complete information, full rationality and lack of risk perception. In this paper, the concept of bounded rationality is incorporated, seeking alternative grounds to the traditional approaches. Against this background, we examine different sets of assumptions based on the concept of rationally bounded energy use and propose policies that may reduce some of the apparent market failures. However, both these claims, as well as the proposed system dynamics models that intend to account for bounded rationality, need to be clearly justified. Here, we do this by indicating, explicitly and implicitly, how bounded rationality operates and what policies and strategies might be appropriate to remove some of the consumers' barriers when confronting decisions. The system dynamics models presented in this paper incorporate consumers' behaviour and alternative policies to assess their likely impact on society. Examples related to the penetration of fuels and lighting appliances are provided, to illustrate the approach.

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“…To conceptualize sophisticated environmental -economic interactions with robust capability, SD has been employed in environmental systems (Deaton and Winebrake 1997;Ford 1999b;Chang et al 2008;Muneepeerakul and Qubbaj 2012) modeling SD (Forrester 1971;Meadows et al 1992; Van den Bergh and Nijkamp 1994;Saeed and Radzicki 1998;Jin et al 2009), ecological modeling (Costanza and Gottlieb 1998;Costanza and Voinov 2001;Arquitt and Johnstone 2008;Huang et al 2008), energy planning (Ford 1999a(Ford , 1999bJin et al 2009), sustainable supply chain management (Seuring and Müller 2008a), sustainability assessment (Krajnc and GlaviÄ 2005;Shmelev 2011;Van Zeijl-Rozema and Ferraguto 2011), and urban environmental sustainability (Yu and Wen 2010;Ianos et al 2012). Uncertainty and ambiguity still exist in expert responses (Hwang and Lin, 1987;Chang et al 2000;Shen et al 2010).…”

Section: Introductionmentioning

confidence: 99%

Methodology for modeling of city sustainable development based on fuzzy logic: a practical case

Jaderi¹,

Ibrahim²,

Jaafarzadeh³

et al. 2014

Journal of Integrative Environmental Sciences

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Information on sustainability can be used for future development planning. This study presents an approach for assessing urban sustainability. Delphi and fuzzy logic methods and the Kruskal-Wallis test were the discovery and verification techniques used. The city system comprised social, economic, and environmental subsystems. The seven orientors of existence, effectiveness, freedom of action, security, adaptability, coexistence, and psychological need were measured using different indicators. The final sustainability output was obtained by aggregation of the multiple orientors and subsystems sustainability values into a unified measure. A fuzzy sustainability index was developed to compare the importance of the sustainability orientors and subsystems. The model was applied to Mahshahr, an industrialized coastal city in Iran. The model output for the subsystems showed significant differences between the economic and environmental subsystems and the social subsystem. The final sustainability output showed that the effectiveness orientor gave the highest sustainability value. The model is dynamic and can be modified for different purposes by changing the indicators. With this model, policy-makers can evaluate existing city sustainability and predict future sustainability by varying the indicators. This can be done on local, regional, and global scales for security and adaptation strategies, mitigation plans, and sustainable development management.

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Cycles in competitive electricity markets: a simulation study of the western United States

Cited by 130 publications

References 13 publications

The Question of Generation Adequacy in Liberalised Electricity Markets

The Question of Generation Adequacy in Liberalised Electricity Markets

Consumers' bounded rationality: the case of competitive energy markets

Methodology for modeling of city sustainable development based on fuzzy logic: a practical case

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