Separation and Volatility of Locational Marginal Prices in Restructured Wholesale Power Markets

Hongyan Li, Junjie Sun and Leigh Tesfatsion ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This study uses an agent-based test bed ("AMES") to investigate separation and volatility of locational marginal prices (LMPs) in an ISO-managed restructured wholesale power market operating over an AC transmission grid. Particular attention is focused on the dynamic and cross-sectional response of LMPs to systematic changes in demand-bid price sensitivities and supply-offer price cap levels under varied learning specifications for the generation companies. Also explored is the extent to which the supply offers of the marginal (price-determining) generation companies induce correlations among neighboring LMPs. Related work can be accessed at: http://www2.econ.iastate.edu/tesfatsi/AMESMarketHome.htm

Keywords: Restructured wholesale power markets; multi-agent learning; demand-bid price sensitivity; AMES Wholesale Power Market Test Bed; agent-based modeling; locational marginal prices (LMPs); LMP separation; LMP volatility; supply-offer price caps (search for similar items in EconPapers)
JEL-codes: C6 D4 D6 L1 L3 L94 Q4 (search for similar items in EconPapers)
Date: 2009-06-09
New Economics Papers: this item is included in nep-cmp
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Separation and volatility of locational marginal prices in restructured wholesale power markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:13075

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