Some Inequalities related to the analysis of electricity auctions

Peter Hästö () and Pär Holmberg
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Peter Hästö: Department of Mathematics and Statistics, Postal: Department of Mathematics and Statistics, P.O. Box 68, FI-00014 University of Helsinki, Finland

No 2005:23, Working Paper Series from Uppsala University, Department of Economics

Abstract: Most balaning markets of electric power are organized as uniform-price auctions. In 2001, the balancing market of England and Wales switched to a pay-as-bid auction with the intention of reducing wholesale electricity prices. Numerical simultations of an electricity auction model have indicated that this should lead to decreased average prices. In this article we prove two inequalities which give an analytic proof of this claim in the same model.

Keywords: supply function equilibrium; uniform-price auction; pay-as-bid auctions; discriminatory auction; oligopoly; capacity constraint; wholesale electricity markets; inequalities (search for similar items in EconPapers)
JEL-codes: C62 D43 D44 L11 L13 L94 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2005-08-26
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Applied Mathematics Letters, 2006, pages 814-819.

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