Bidding behavior in the Chilean electricity market

Javier Bustos-Salvagno
Authors registered in the RePEc Author Service: Javier Bustos Salvagno ()

Energy Economics, 2015, vol. 51, issue C, 288-299

Abstract: Contracts in power markets are usually obscure. From recently public auctions of long-term supply contracts we can obtain information on how contract prices are determined. To understand generators' bidding behavior, this paper examines the Chilean experience from 2006 to 2011. Using a divisible good auction model we provide a theoretical framework that explains bidding behavior in terms of expected spot prices and contracting positions. Empirical estimations indicate heterogeneity in the cost of over-contracting depending on incumbency, bringing evidence of significant barriers to entry.

Keywords: Auctions; Electricity; Forward contracts; Chile; Spot price; Contracting capacity; Entry (search for similar items in EconPapers)
JEL-codes: C72 D44 L13 L94 Q41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:51:y:2015:i:c:p:288-299

DOI: 10.1016/j.eneco.2015.07.003

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