Modeling Electricity Markets as Two-Stage Capacity Constrained Price Competition Games under Uncertainty

The last decade has seen an increasing application of game theoretic tools in the analysis of electricity markets and the strategic behavior of market players. This paper focuses on the model examined by Fabra et al. (2008), where the market is described by a two-stage game with the firms choosing their capacity in the first stage and then competing in prices in the second stage. By allowing the firms to endogenously determine their capacity, through the capacity investment stage of the game, they can greatly affect competition in the subsequent pricing stage. Extending this model to the demand uncertainty case gives a very good candidate for modeling the strategic aspect of the investment decisions in an electricity market. After investigating the required assumptions for applying the model in electricity markets, we present some numerical examples of the model on the resulting equilibrium capacities, prices and profits of the firms. We then proceed with two results on the minimum value of price caps and the minimum required revenue from capacity mechanisms in order to induce adequate investments

Evaluating the New Greek Electricity Market Rules

The Greek Regulatory Authority for Energy (RAE), in view of the initiation of the new wholesale electricity market on January 1st 2009 as a Day-Ahead mandatory pool, undertook the design and implementation of a simulator for the market. The simulator consists of several interacting modules representing all key market operations and dynamics including day-ahead scheduling, natural gas system constraints, unplanned variability of loads and available capacity driven either by uncertain stochastic outcomes or deliberate participant schedule deviations, real time dispatch, and financial settlement of day ahead and real-time schedule differences. The modules are integrated into one software package. The intended use of the simulator is to elaborate on and allow RAE to investigate the impact of participant decision strategies on market outcomes. The ultimate purpose is to evaluate the effectiveness of Market Rules, whether existing or contemplated, in providing incentives for competitive behaviour and in discouraging gaming and market manipulation. In this paper the simulator is used to analyze market design aspects and rules concerning the co-optimization of energy and reserves in the Day-Ahead energy market and the efficiency of the imbalance settlement procedure compared to real-time pricing.Electricity Market Design; Market Simulation; Regulation; Unit Commitment

The Greek Capacity Adequacy Mechanism: Design, Incentives, Strategic Behavior and Regulatory Remedies

This paper describes and analyzes the Greek Capacity Market or, as named, the “Capacity Adequacy Mechanism”. A detailed description of the recently established mechanism is given, whose design is a hybrid model combining elements from three different designs: the US Capacity Markets, the Capacity Payment Mechanisms and the Centralized Auctions for Capacity Contracts. Next, the goals of this design are explained. In the case of Greece the goals are not restricted just to the so-called “missing money” problem, therefore an analysis follows examining the incentives given to the market participants. The analysis shows the dependence of the mechanism on mainly two factors: the over/under-capacity of the market and the strategic behavior of the market participants, especially of the incumbent. In general, the Capacity Adequacy Mechanism is expected to operate quite satisfactory, giving the “right” incentives to the market participants. Some minor amendments to the rules are proposed, aiming to further increase its efficiency.Capacity Mechanisms, Electricity Markets, Mechanism Design, Strategic Behavior

SEE Regional Wholesale Market Design: Recommendations, Available Options and Implementation

In 2005 the countries of South East Europe (SEE) committed themselves to develop a regional energy market in SEE. The World Bank offered to provide technical assistance and recommendations for the most effective implementation of the electricity wholesale market opening. This paper presents and discusses the main proposals of the Study for the SEE Regional Market Design. It then proceeds to the provision of recommendations on how the Study’s proposals can be enhanced and fit better to the current status of the SEE markets.South East Europe, Regional Electricity Market, Market Design.

Modeling Electricity Markets as Two-Stage Capacity Constrained Price Competition Games under Uncertainty

The last decade has seen an increasing application of game theoretic tools in the analysis of electricity markets and the strategic behavior of market players. This paper focuses on the model examined by Fabra et al. (2008), where the market is described by a two-stage game with the firms choosing their capacity in the first stage and then competing in prices in the second stage. By allowing the firms to endogenously determine their capacity, through the capacity investment stage of the game, they can greatly affect competition in the subsequent pricing stage. Extending this model to the demand uncertainty case gives a very good candidate for modeling the strategic aspect of the investment decisions in an electricity market. After investigating the required assumptions for applying the model in electricity markets, we present some numerical examples of the model on the resulting equilibrium capacities, prices and profits of the firms. We then proceed with two results on the minimum value of price caps and the minimum required revenue from capacity mechanisms in order to induce adequate investments.Capacity Constraints; Electricity Markets; Regulatory Policy; Strategic Behaviour;

Developing a simulator for the Greek electricity market

Following the liberalization of the Greek electricity market, the Greek Regulatory Authority for Energy (RAE) undertook the design and implementation of a simulator for the wholesale market and its interactions with the Natural Gas Transportation System. The simulator consists of several interacting modules representing all key market operations and dynamics including (i) day-ahead scheduling based on bids of market participants, (ii) natural gas system constraints, (iii) unplanned variability of loads and available capacity driven either by uncertain stochastic outcomes or deliberate participant schedule deviations, (iv) real time dispatch, and (v) financial settlement of day ahead and real time schedule differences. The modules are integrated into one software package capable of simulating all market dynamics, deliberate or probabilistic, and their interactions across all relevant time scales. The intended use of the simulator is to elaborate on and allow RAE to investigate the impact of participant decision strategies on market outcomes. The ultimate purpose is to evaluate the effectiveness of Market Rules, whether existing or contemplated, in providing incentives for competitive behaviour and in discouraging gaming and market manipulation. This paper describes the development of the simulator relative to the current Greek Electricity Market Design and key contemplated revisions.simulation; regulatory policy; electricity markets; market design;

Decentralisation: a One-to-many Relationship. The Case of Greece

There is no doubt that even a cursory examination of the indisputable efforts for decentralization in Greece, will reveal that the main problem lies within the ever expanding bureaucratic labyrinth of its political decision making processes and the underlying political and administrative system that generates and supports them. In short, this political system seems to strive for inclusiveness and broad acceptance, rather than theoretical consistency or elegance, setting the government incapable to play a truly coordinating role and exhibit the admistrative wisdom that it implies. Seeking in this respect, to accommodate new demands as they emerge by means, insofar as possible, that leave previous arrangements (programs and administrative regulations) undisturbed, which in turn involve the least possible disruption for public enterprises, as well as the least possible inconvenience and annoyance for institutions and individuals alike, who have built their life styles around the expectation of system stability. However, in terms of its administrative system, Greece has the same characteristics and problems with most of the Mediterranean European Countries. Consequently, the potential of future decentralization policies in a regional level, as they are expressed by either the elimination of regional disparities or the formulation of regional restructuring strategies, should be seen with respect to the extended political framework within which they have to be implemented. In our study, this is defined as the Mediterranean frontier. Within this framework, this paper reviews the historical course and critically presents the results of the proclaimed decentralization efforts in Greece. Specifically, certain political and socioeconomic indicators are utilized, in order both to micro evaluate the regional disparities within the country and to generate a parallel macro comparison with the other Mediterranean member states of the European Union.Decentralization; Greece

Geographica: A Benchmark for Geospatial RDF Stores

Geospatial extensions of SPARQL like GeoSPARQL and stSPARQL have recently been defined and corresponding geospatial RDF stores have been implemented. However, there is no widely used benchmark for evaluating geospatial RDF stores which takes into account recent advances to the state of the art in this area. In this paper, we develop a benchmark, called Geographica, which uses both real-world and synthetic data to test the offered functionality and the performance of some prominent geospatial RDF stores

Defining Demographic Change in Locational Planning Problems

Since population, which actually represents demand in any organised or rearranged service system, is the final target and recipient of every planning strategy or policy action, the success of locational analysis and the locational planning process, is largely determined upon the decision makers' ability to estimate the study area's future population size and distribution. Such estimations can be demographically achieved through the analysis and extrapolation into the future of carefully measured birth, death and migration rates according to observed trends and tendencies of the relevant socio-economic factors that affect them. As opposed to traditional generalisations and recent practices, which deal with population as a whole, the approach presented in this paper focuses on each individual's attitude towards the issue of intended births, which when aggregated formulate a fertility rate. More specifically, certain socio-economic characteristics, based on questionnaire data, are analysed using discrete choice models in order to estimate the prospective family-size desires. In this respect, a birth-rate choice model is derived through the assessment of the expected number of children to be born in a household during a specific time period and with regard to its socio-economic identity. Moreover, modifications of the above characteristics generate alternative family-size scenarios and thus differing population forecasts, which in turn can lead to unforeseen solution strategies and thus a more sophisticated and pragmatic decision-making process when dealing with facility-location problems both in the public and the private sector.Locational Planning; Discrete Choice models; Population Projections; Greece