Real-time Pricing in Power Markets

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Real-time Pricing in Power Markets

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Title: Real-time Pricing in Power Markets
Who Gains?
Author: Boom, Anne; Schwenen, Sebastian
Abstract: We examine welfare e ects of real-time pricing in electricity markets. Before stochastic energy demand is known, competitive retailers contract with nal consumers who exogenously do not have real-time meters. After demand is realized, two electricity generators compete in a uniform price auction to satisfy demand from retailers acting on behalf of subscribed customers and from consumers with real-time meters. Increasing the number of consumers on real-time pricing does not always increase welfare since risk-averse consumers dislike uncertain and high prices arising through market power. In the Bertrand case, welfare is the same with all or no consumers on smart meters.
URI: http://hdl.handle.net/10398/8610
Date: 2012-12-21
Notes: Paper presented at several conferences in 2012.

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