Auctions and trading in energy markets -- an economic analysis

Auctions and trading in energy markets -- an economic analysi

Auctions to gas transmission access: The British experience

Auctions to gas transmission access: The British experienc

Asteroid occultations today and tomorrow: toward the GAIA era

Context: Observation of star occultations is a powerful tool to determine shapes and sizes of asteroids. This is key information necessary for studying the evolution of the asteroid belt and to calibrate indirect methods of size determination, such as the models used to analyze thermal infrared observations. Up to now, the observation of asteroid occultations is an activity essentially secured by amateur astronomers equipped with small, portable equipments. However, the accuracy of the available ephemeris prevents accurate predictions of the occultation events for objects smaller than ~100 km. Aims: We investigate current limits in predictability and observability of asteroid occultations, and we study their possible evolution in the future, when high accuracy asteroid orbits and star positions (such as those expected from the mission Gaia of the European Space Agency) will be available. Methods: We use a simple model for asteroid ephemeris uncertainties and numerical algorithms for estimating the limits imposed by the instruments, assuming realistic CCD performances and asteroid size distribution, to estimate the expected occultation rate under different conditions. Results: We show that high accuracy ephemerides which will be available in the future will extend toward much smaller asteroids the possibility of observing asteroid occultations, greatly increasing the number of events and objects involved. A complete set of size measurements down to ~10 km main belt asteroids could be obtained in a few years, provided that a small network of ground-based 1m telescopes are devoted to occultation studies

Auctions and trading in energy markets -- an economic analysis

Auctions are playing an increasingly prominent role in the planning and operation of energy markets. Comparing the New Electricity Trading Arrangements to the former electricity Pool in England and Wales requires some analysis of the relative merits of uniform versus discriminatory pricing rules, and use of the gas network in Britain and electricity interconnectors around Europe is allocated on the basis of auction results. In this paper we discuss the changes in the trading arrangements in the electricity industry in England and Wales as well as some of the results to date. We also look at the wider issue of using auctions to replace regulation by market solutions for managing the natural monopolies in energy markets.auctions, electricity, gas, interconnectors, networks

Auctions to gas transmission access: The British experience

When access to monopoly owned networks is constrained auctioning access rights can increase the efficiency of allocations relative to negotiation and grandfathering when there is sufficient competition among network users. Historically, access rights to entry capacity on the British gas network were granted by the monopoly network owner via negotiation; rights were later based on regulated tariffs with an increasing reliance on market based constraint resolution by the system operator. In 1999 an auction mechanism for allocating rights was introduced. Comparing the different allocation methods we conclude that where there is competition at entry terminals auctions have been successful with respect to anticipating spot prices, capturing producer rents and reducing the costs of alleviating network constraints. Moreover, auctions are more transparent and better facilitate entry.gas, network, access, auction, regulation

Competition in electricity supply: will ‘1998’ Be worth it?

Starting in 1998, the electricity market in England and Wales will be opened up to full competition,and all consumers will be allowed to choose their electricity supplier. This promises to result in lower prices, but there will be additional transactions costs exceeding £100 million a year for the first five years. Relative to a counterfactual without competition, there are likely to be large transfers from electricity companies (and the coal industry) to consumers, but the companies lose more than consumers gain. This conclusion might be reversed if competitive pressure leads to significant additional cost savings in the future.

Use of Long-term Auctions for Network Investment

Short-term auctions for access to entry terminals of the British gas-network appear to successfully allocate scarce resources and capture scarcity rent. Now long-term auctions are being introduced to guide future capacity expansion decisions. In our model the fraction of rights issued in the long-term auction turns out to be a crucial design parameter. Even a “hypothetically” optimal parameter choice can in general only satisfy one of three aims: unbiased provision of capacity, full revelation of private information and minimisation of distortions from network effects. The results suggest that long-term auctions for transmission capacity are not necessarily preferable to regulatory approved capacity expansion.Auctions, gas, investment, networks, regulation

Should we reconsider competition in residential electricity supply? Survey results in North Carolina

Retail competition has been introduced in many states as part of electricity industry deregulation. Following problems in the electricity market in California in 2000/01 many states, including NC, put deregulation plans on hold. Where retail competition is allowed consumers can choose their electricity supplier, and companies can compete for customers on the basis of rates and/or other options such as green energy choices. The welfare benefits of retail competition depend on consumers’ willingness to switch suppliers, and in many cases people choose to stay with their current supplier even though rivals offer savings. In that sense consumers are ‘sticky’ in the same way they are with other services such as banking and credit. The question then becomes: should states reconsider retail competition or stay with the status quo? To help answer this question we survey residents in two North Carolina counties. Our survey focuses on: (i) households’ knowledge of and interest in retail competition (ii) factors that would encourage them to switch suppliers, with an emphasis on smart meters and (iii) how large the potential savings would have to be to encourage switching. Key Words: electricity supply, retail competition, switching

Asymmetric demand information in uniform and discriminatory call auctions: an experimental analysis motivated by electricity markets

We study the outcomes of experimental multi-unit uniform and discriminatory auctions with demand uncertainty. Our study is motivated by the ongoing debate about market design in the electricity industry. Our main aim is to compare the effect of asymmetric demand-information between sellers on the performance of the two auction institutions. In our baseline conditions all sellers have the same information, whereas in our treatment conditions some sellers have better information than others. In both information conditions we find that average transaction prices and price volatility are not significantly different under the two auction institutions. However, when there is asymmetric information among sellers the discriminatory auction is significantly less efficient. These results are not in line with the typical arguments made in favor of discriminatory pricing in electricity industries; namely, lower consumer prices and less price volatility. Moreover, our results provide some indication that discriminatory auctions reduce technical efficiency relative to uniform auctions.Experiments, asymmetric information, discriminatory price auctions, uniform price auctions, electricity industries