Composition of Electricity Generation Portfolios, Pivotal Dynamics, and Market Prices

Albert Banal-Estanol and Augusto Rupérez Micola ()
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Augusto Rupérez Micola: Department of Economics and Business, Universitat Pompeu Fabra and Barcelona Graduate School of Economics, 08005 Barcelona, Spain

Management Science, 2009, vol. 55, issue 11, 1813-1831

Abstract: We use simulations to study how the diversification of electricity generation portfolios influences wholesale prices. We find that the relationship between technological diversification and market prices is mediated by the supply-to-demand ratio. In each demand case there is a threshold where pivotal dynamics change. Pivotal dynamics pre- and post-threshold are the cause of nonlinearities in the influence of diversification on market prices. The findings are robust to changes in the main market assumptions.

Keywords: electricity; market power; simulations; technology diversification (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:55:y:2009:i:11:p:1813-1831

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