Day-Ahead Electricity Markets: Is There a Place For a Day-Ahead Market in NZEM?

Lewis Evans and Kevin Counsell

No 18981, Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation

Abstract: In this paper we explain the operation and design of day-ahead markets in an electricity market. Day-ahead markets complement real-time markets which must be run to ensure balance in the system and offer a number of benefits to electricity market participants. We argue that in the context of the New Zealand electricity market the benefits of operating a day-ahead market are likely to outweigh the costs. We show that simple forecasts suggest day-ahead prices in New Zealand would be considerably less volatile than real-time prices. As day-ahead markets are effectively hedge markets for a short time period the issues we raise are also important for the operation and development of other longer-term hedge markets.

Keywords: electricity; day-ahead market (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwcsr:18981

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