Electricity Markets: How Many, Where and When?

Most markets compromise the economist’s ideal of matching the marginal benefits to consumers with the marginal cost of supply for incremental purchases because individual buyers and sellers are aggregated over space, time and/or other product attributes like quality or reliability. These aggregations into discrete market segments are designed to facilitate transactions by reducing search and distribution costs, and they may enhance the competitiveness of each market segment by encompassing a larger number of buyers and sellers, but at some loss of precise efficiency matches. Furthermore, as individual market segments grow in size, the price differences across their boundaries may also increase which can raise the transactions costs associated with increased arbitrage. These are important considerations for electricity markets since significant physical, operational and capacity barriers separate and define these markets over space and time. Thus principles for the optimal structure ...

• Type: Conference
• Year: 2006
• Where: HICSS
• Authors: Nodir Adilov, Richard E. Schuler
• Keywords: Biometrics, Forward Markets, HICSS 2006, Market Segments, Markets, System Sciences