Paid to produce absolutely nothing? A Nash-Cournot analysis of a proposed power purchase agreement

Europe’s clean energy transition is imperative to combat climate change and represents an economic opportunity to become independent of fossil fuels. As such, the energy transition has become one of the most important, but also one of the most challenging economic and societal projects today. Electricity systems of the past were characterized by price-inelastic demand and only a small number of large electricity generators. The transition towards intermittent renewable energy sources changes this very paradigm. Future electricity systems will consist of many thousands of electricity generators and consumers that actively participate in markets, offering flexibility to balance variable electricity supply in markets with a high spatial and temporal resolution. These structural changes have ample consequences for market operators, generators, industrial consumers as well as prosumers. While a large body of the literature is devoted to the energy transition in engineering and the natural sciences, it has received relatively little attention in the recent business research literature, even though many of the central challenges for a successful energy transition are at the core of business research. Therefore, we provide an up-to-date overview of key questions in electricity market design and discuss how changes in electricity markets lead to new research challenges in business research disciplines such as accounting, business & information systems engineering, finance, marketing, operations management, operations research, and risk management.

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Electricity Markets in a Time of Change: A Call to Arms for Business Research

Bichler

Buhl

Knörr

et al. 2022

Schmalenbach J Bus Res

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Mitigating financial risk of corporate power purchase agreements via portfolio optimization

2022

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A note on the uniqueness of Nash–Cournot equilibria in an oligopolistic energy market with renewable generation and demand uncertainty

Chaiken,

Duggan

2024

Energy Economics

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Paid to produce absolutely nothing? A Nash-Cournot analysis of a proposed power purchase agreement

Cited by 7 publications

References 22 publications

Electricity Markets in a Time of Change: A Call to Arms for Business Research

Electricity Markets in a Time of Change: A Call to Arms for Business Research

Mitigating financial risk of corporate power purchase agreements via portfolio optimization

A note on the uniqueness of Nash–Cournot equilibria in an oligopolistic energy market with renewable generation and demand uncertainty

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