Designing Competitive Electricity Markets

This volume contains papers that were discussed at the fust workshop on Markets for Electricity: Economics and Technology (MEET) held at Stanford University on March 7-8, 1997. The workshop's focus was how to design competitive electricity markets in an industry undergoing rapid changes in both economics and technology. We are very appreciative of the generous funding support provided by Dr. Gail McCarthy, Director of Strategic Science and Technology at Electric Power Research Institute. We would like to acknowledge all the workshop participants, including Paul Joskow, Martin Baughman, William Hogan, Robert Wilson, Granger Morgan, Paul Kleindorfer, Shmuel Oren, Edward Kahn, Stephen Rassenti, Stephen Stofl:, Stephen Peck, Victor Niemeyer, Jeremy Bloom, Martin Weinberger and Al Pak, for their significant contributions in discussing these issues at that workshop. CONTRIBUTING AUTHORS Martin L. Baughman is Professor of Electrical and Computer Engineering, University of Texas at Austin. Hung-po Chao is Area Manager of Policy and Risk Analysis, Electric Power Research Institute, Palo Alto, California, and Consulting Professor with Department of Engineering-Economic Systems and Operations Research, Stanford University. William W. Hogan is Lucius N. Littauer Professor of Public Policy and Administration, John F. Keunedy School of Government, Harvard University, Cambridge, Massachusetts and Senior Advisor, Putnam, Hayes & Bartlett, Inc., Cambridge, Massachusetts. Hillard G. Huntington is Executive Director, Energy Modeling Forum, Stanford University, Stanford, California. Paul L. Joskow is Elizabeth and JamesKillian Professor of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts. Edward P. Kahn is Vice President, National Economic Research Associates, San Francisco, Califonria.

Texte du rabat

As electric restructuring spreads rapidly across countries and states, leading industry experts are increasingly concerned that in many instances policy makers are pushing their proposals into practice more quickly than policy analysts can provide answers to difficult questions of market design. In this process, different structures for organizing this industry are evolving without a firm basic understanding of their implications for long-term market performance. There is a risk that, in the process, we may be inadvertently locked into an inferior market design that will be costly to change. br/ emDesigning Competitive Electricity Markets/em develops some guiding principles to be used when evaluating alternative proposals for reorganizing the US electric power industry. Preliminary versions of the papers in this book were presented at a Workshop convened by the Electric Power Research Institute and held at Stanford University in March 1997. The authors are prominent economists, operation researchers, and engineers who have been instrumental in the development of the conceptual framework for electric power restructuring both in the United States and in other countries. br/ Rather than espousing a particular market design for the industry's future, each author focuses on an important issue or set of issues and tries to frame the questions for designing electricity markets using an international perspective. The book focuses on the economic and technical questions important in understanding the industry's long-term development rather than providing immediate answers for the current political debates on industry competition. Extensive issues are covered, including: the role of the system operator; the problems of ensuring longer-term investment in expanding the transmission system, and in industry research and development; the problems in pricing that are created by arbitrarily segmenting related markets; the relationship between efficiency in the near and long term; ownership rights and incentives; and designing experiments to better understand the operation of different auction mechanisms. br/ The intended audience for this volume includes policy-makers, policy-oriented academics, and corporate leaders with an interest in designing workable and more efficient electricity markets. The arguments in each chapter are based upon sound economic principles but do not require expertise in mathematical modeling or technical economic analysis.

Résumé
`*Pigou vs. Coase. The intellectual fight about the structure of the electricity transmission industry also involves disputes over how centralized or decentralized the transmissiom market can be. *Designing Competitive Electricity Markets is an excellent source of insight about these arguments. This book contains thoughtful essays by a who's who of academic electricity experts, including Paul Joskow, Schmuel Oren, William Hogan, Vernon Smith, Robert Wilson, and Hung-po Chao.'
Regulation, 23:3
` This is a rich book on the subject of how to design competitive electricity markets that ranges in style form survey papers of the literature. It provides a good introduction to the subject and will allow readers to familiarise themselves with many of the basic arguments behind the details of electricity market design.'
The Journal of Energy Literature 7:1 (2001)

Contenu
1 Introduction: Economic and Technological Principles in Designing Power Markets.- 2 Restructuring, Competition and Regulatory Reform in the U.S. Electricity Sector.- 3 Nodes and Zones in Electricity Markets: Seeking Simplified Congestion Pricing.- 4 Ownership Structure, Contracting and Regulation of Transmission Services Providers.- 5 Authority and Responsibility of the ISO: Objectives, Options and Tradeoffs.- 6 Pricing Issues.- 7 Deregulating Electric Power: Market Design Issues and Experiments.- 8 Binding Constraints of Electricity Restructuring: An Inventory.- 9 Investing in Transmission Facilities- Why, by Whom, for Whom.- 10 The Role of Research and New Technology in a Restructured Networked Energy System.- 11 Design Principles.- 12 An Institutional Design for an Electricity Contract Market with Central Dispatch.