Auction Markets for Dispatchable Power: How to Score the Bids

Steven Stoft and Edward P Kahn

Journal of Regulatory Economics, 1991, vol. 3, issue 3, 275-86

Abstract: Competitive bidding for electric generating capacity is becoming based on economic dispatch rather than the PURPA "must-take" norm. Incorporating economic dispatch into bidding requires different price scoring procedures. The "avoided cost" of a dispatchable project is determined by the energy price offered. Price scoring methods based on a "percentage of avoided cost" approach are uneconomically biased against baseload projects, because they neglect the duration effects of their dispatch. The bias is illustrated in a simple model of economic dispatch. A number of utilities use the "percentage of avoided cost" method for dispatchable capacity. They can correct the bias by using a net benefits per kW measure of economic value. Copyright 1991 by Kluwer Academic Publishers

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:3:y:1991:i:3:p:275-86

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2

Access Statistics for this article

Journal of Regulatory Economics is currently edited by Menaham Spiegel

More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().