Electricity Scarcity Pricing Through Operating Reserves

William W. Hogan

Economics of Energy & Environmental Policy, 2013, vol. Volume 2, issue Number 2

Abstract: Suppressed prices in real-time markets provide inadequate incentives for both generation investment and active participation by demand bidding. An operating reserve demand curve developed from first principles would improve reliability, support adequate scarcity pricing, and be straightforward to implement within the framework of economic dispatch. This approach would be fully compatible with other market-oriented policies. Better scarcity pricing would also contribute to long-term resource adequacy.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (66)

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