Equilibrium Predictions in Wholesale Electricity Markets

Talat Genc and Pierre-Olivier Pineau

No 1015, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: We review supply function equilibrium models and their predictions on market outcomes in the wholesale electricity auctions. We discuss how observable market characteristics such as capacity constraints, number of power suppliers, load distribution and auction format affect the behavior of suppliers and performance of the market. We specifically focus on the possible market power exerted by pivotal suppliers and the comparison between discriminatory and uniform-price auctions. We also describe capacity investment behavior of electricity producers in the restructured industry.

Keywords: Electricity markets; Supply function equilibrium; Markov perfect equilibrium; electricity auctions; pivotal suppliers; capacity investment. (search for similar items in EconPapers)
JEL-codes: L94 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010
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Citations: View citations in EconPapers (2)

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