 Peak-load Pricing with Different Types of DispatchabilityKlaus Eisenack and Mathias Mier No V-411-18, Working Papers from University of Oldenburg, Department of Economics Abstract: We extend the theory of peak-load pricing by considering that the production with different technologies can be adjusted within their capacity at different speeds. In the established analysis, all production decisions can be made after the random variables realize. In our setting, in contrast, some decisions are made before, others after. We consider fixed load and three types of capacities: medium-dispatchable capacity needs to be scheduled ahead of actual production, non-dispatchable capacity produces randomly, and highly-dispatchable capacity can instantly adjust. If capacities differ in their dispatchability, some standard results of peak-load pricing break down, e.g., not all types of capacity will be employed. Either a system with medium-dispatchables only, or a system dominated by non-dispatchables and supplemented by highly-dispatchables occurs, where non- and highly-dispatchables could be substitutes or complements. For the latter system capacity decisions cannot be decentralized by markets since costs recovery is not possible. Keywords: peak-load pricing; dispatchability; costs revcovery; market design; renewable engergy; energy transition (search for similar items in EconPapers) Published in Oldenburg Working Papers V-411-18 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:old:dpaper:411 Access Statistics for this paper More papers in Working Papers from University of Oldenburg, Department of Economics Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.