Reactive market power analysis using must-run indices

This paper investigates the issues of reactive power must-run capacity in power system operations, hence in electricity markets. A must-run index-based method is proposed in the paper to measure the market power held by reactive power suppliers. The Nordic 32-bus system and the IEEE 118-bus system are used to test the proposed method. The market power holders of reactive power found using the proposed method are in accord with that found in the realistic Nordic system operation and in the existing analysis of IEEE 118-bus system. The paper identifies through must-run indices possible conditions that could lead to market power in the case of applying a bid structure within a market framework. Furthermore, market structure drawbacks can cause the appearance of market power even in a topologically ideal system. © 2008 IEEE.published_or_final_versio

Characterization of coal products from high temperature processing of Usibelli low-rank coals

This research project was conducted in association with Gilbert/Commonwealth Inc. as part of an overall techno-economic assessment of high temperature drying of low-rank coals. This report discusses the characteristics of the dried/pyrolyzed products of two high temperature, evaporative processes and the dried product from a hydrothermal process. The long term goal of this and other coal drying studies conducted at MIRL, was to define drying technologies that have significant and real potential to competitively move Alaska's, low-rank coals (LRCs) into the export, steam coal market of the Pacific Rim. In 1990, Japan imported 33 million metric tons (mt) of steam coal with an additional 39 million mt imported by other Far East nations(2). Australia dominates the export steam coal market to these Pacific Rim countries and exported 48 million mt in 1990 and an additional 61 million mt of metallurgical coal(2). The worldwide steam coal export market has been expanding rapidly, from 20 million mt in 1973 to 150 million mt in 1989, and is expected to double to nearly 300 million mt by the end of the century(3). Could Alaska capture only 3% of the projected new world steam coal market, which is not an unreasonable expectation, the value of the state's coal exports would soar from nominally $28 million per year to over$100 million per year. However, without development of economical methods for drying/stabilizing Alaskan LRCs, the only increase in export of Alaskan coals may be from the few "higher rank" coals within a "reasonable" transport range of the existing Alaska rail system or tidewater. Presently the coal from the Usibelli Coal Mine is the only low-rank coal exported internationally as a steam coal; primarily for its blending properties with other coal to improve combustion. But for Alaskan low-rank coals to truly stand on their own merits, economical drying processes must be developed that produce a physically and chemically stable dried product. The technologies that have the most potential for increasing the use of Alaskan coals are those that can reduce the moisture content of these coals economically, and produce a fuel that is accepted in the international market place. Drying technologies will no doubt differ, depending on the end use of the fuel; be it dried lump coal, briquettes or pellets for pulverized coal or stoker applications, or concentrated coal-water fuels made from hot water dried LRCs. There are a number of developing processes that may work with Alaskan coals. Some drying processes, however, have been plagued by the production of excessive amounts of coal fines, Since the demand for Alaskan coal is currently limited to lump size coal, large quantities of fines are a definite liability. In this study, two high temperature drying/pyrolysis processes and one hydrothermal process were investigated. The high temperature drying/pyrolysis processes were conducted at (1) the Western Research Institute, (WRI) an affiliate of the University of Wyoming Research Corporation, Laramie, WY, and (2) Coal Technology Corporation (CTC) of Brisol, VA. Hydrothermal processing was conducted at MIRL, University of Alaska Fairbanks. A summary of these processes and the products they produced follows.The University of Alaska also provided matching funds for this project, which was a portion of a larger study that leveraged U.S. Department of Energy funds

Cloud Index Tracking: Enabling Predictable Costs in Cloud Spot Markets

Cloud spot markets rent VMs for a variable price that is typically much lower than the price of on-demand VMs, which makes them attractive for a wide range of large-scale applications. However, applications that run on spot VMs suffer from cost uncertainty, since spot prices fluctuate, in part, based on supply, demand, or both. The difficulty in predicting spot prices affects users and applications: the former cannot effectively plan their IT expenditures, while the latter cannot infer the availability and performance of spot VMs, which are a function of their variable price. To address the problem, we use properties of cloud infrastructure and workloads to show that prices become more stable and predictable as they are aggregated together. We leverage this observation to define an aggregate index price for spot VMs that serves as a reference for what users should expect to pay. We show that, even when the spot prices for individual VMs are volatile, the index price remains stable and predictable. We then introduce cloud index tracking: a migration policy that tracks the index price to ensure applications running on spot VMs incur a predictable cost by migrating to a new spot VM if the current VM's price significantly deviates from the index price.Comment: ACM Symposium on Cloud Computing 201

Exchange rate behavior and exchange rate puzzles: why the 18th century might help

Este artículo analiza el comportamiento de los tipos de cambio entre España y Gran Bretaña durante el siglo XVIII; en concreto, de los tipos de cambio en el mercado de Londres sobre tres ciudades españolas, entre los años 1699 y 1826. Tras una breve exposición del funcionamiento del sistema monetario español y de la determinación de los tipos de cambio, estudiamos hasta qué punto el tipo de cambio respondía a variables fundamentales, utilizando dos modelos teóricos generalmente aceptados. Los resultados sugieren que la paridad de poder adquisitivo se cumplió durante el siglo XVIII, y que el tipo de cambio se movía de forma paralela a los diferenciales de inflación. Al final del siglo aparecen desviaciones de la paridad de poder adquisitivo, que atribuimos a alteraciones en el tipo de cambio real causadas por fluctuaciones en el comercio bilateral entre España y Gran Bretaña y, quizá, a diferenciales de productividad.This article explores the behavior of exchange rates in Spain during the 18th century. We analyze the exchange rates quoted in London on three Spanish cities between 1699 and 1826. After a brief review of how the Spanish monetary system worked and how exchange rates were determined, we assess to which extent the exchange rate responded to market fundamentals by testing two theoretical models of exchange rate determination. The results suggest that purchasing power parity held during the 18th century, with the exchange rate tracking quite closely the behavior of inflation differentials. Deviations from PPP appeared at the end of the century, due mostly to changes in the real exchange rate caused by the bilateral trade between Spain and Great Britain and, maybe, due to productivity differentials

Investigating the Impacts of Distributed Generation on Transmission Expansion Cost: An Australian Case Study

Distributed generation (DG) is rapidly increasing its penetration level in Australia, and is expected to play a more important role in the power industry. An important benefit of DG is its ability to defer transmission investments. In this paper, a simulation model is implemented to conduct quantitative analysis on the effect of DG on transmission investment deferral. The transmission expansion model is formulated as a multi-objective optimization problem with comprehensive technical constraints, such as AC power flow and system security. The model is then applied to study the Queensland electricity market in Australia. Simulation results show that, DG does show the ability to reduce transmission investments. This ability however is greatly influenced by a number of factors, such as the locations of DG, the network topology, and the power system technical constraints.

Regulatory Structure in Futures Markets: Jurisdictional Competition Among the SEC, the CFTC, and Other Agencies

This paper studies competition among alternative regulatory bodies for authority over innovative financial contracts. In the United States, this rivalry embraces not only the Commodity Futures Trading Commission and the Securities and Exchange Commission, but state and federal deposit-institution regulators and various private regulatory cooperatives. From a political perspective, multipleregulators develop as a way of formally providing ongoing protection for the interests of diverse political constituencies. But from an economic perspective,competition resulting from overlaps in regulatory responsibility establishes an evolutionary mechanism for adapting regulatory structures to technological and regulation-induced innovation. Using both perspectives, this paper explains how interaction between governmental regulatory agencies and self-regulatory cooperatives produces more-efficient regulatory structures over time.The study also seeks to catalog the particular costs and benefits that may be associated with the regulatory tools used to control futures and securities markets(e.g., broker and trader registration, disclosure requirements, margin requirements,and contract-approval processes) and with changes in the distribution of jurisdiction over these tools. The analysis seeks to clarify the tradeoff between the perceived probability of various problems of market performance (e.g., contract nonperformance, widespread financial instability, and activities such as price manipulation by which corrupt or sophisticated operators separate naive investors from their wealth) and the implicit and explicit cost of reducing this probability.

Cartel detection in procurement markets

Cartel detection is usually viewed as a key task of either competition authorities or compliance officials in firms with an elevated risk of cartelization. We argue that customers of hard core cartels can have both incentives and possibilities to detect such agreements on their own initiative through the use of market-specific data sets. We apply a unique data set of about 340,000 market transactions from 36 smaller and larger customers of German cement producers and show that a price screen would have allowed particularly larger customers to detect the upstream cement cartel before the competition authority. The results not only suggest that monitoring procurement markets through screening tools has the potential of substantial cost reductions - thereby improving the competitive position of the respective user firms - but also allow the conclusion that competition authorities should view customers of potentially cartelized industries as important allies in their endeavour to fight hard core cartels. --business economics,procurement,antitrust policy,cartels,detection,screening