ELFORSK Foreword Despite having had a deregulated electricity market in Sweden for over ten years we still need to increase our understanding as to how deregulated electricity markets actually work and how possible problems are to be solved. The electricity sector is key in greenhouse gas mitigation. Electricity generation accounts for roughly one-third of carbon dioxide emissions in the indust...

Electricity markets are complex environments, involving a large number of different entities, playing in a dynamic scene to obtain the best advantages and profits. MASCEM (Multi-Agent System for Competitive Electricity Markets) is a multiagent electricity market simulator that models market players and simulates their operation in the market. Market players are entities with specific characteri...

This paper analyses the impact of power market structure on the pass-through rate (PTR) of CO2 emissions trading costs on electricity prices from a theoretical point of view, including graphical illustrations and mathematical proofs. Market structure refers in particular to the number of firms active in the market as well as to the shape of the power demand and supply curves. In addition, it an...

We address a method for pricing electricity contracts based on valuation of ability to produce power, which is considered as the true underlying for electricity derivatives. This approach shows that an evaluation of free production capacity provides a framework where a change–of–numeraire transformation converts electricity forward market into the common settings of money market modeling. Using...

A major cause for many of the problems that have afflicted wholesale electricity markets is the unrealized potential for the demand-side to be a full participant. Ironically, when Fred Schweppe first envisioned an electricity market in which prices efficiently coordinated the actions of market participants, he focused on the potential for improved efficiency in power consumption, not generation...

Rising prices in the German wholesale electricity market have spurred discussions about the potentials and the abuse of market power. Particularly since the introduction of emission certificates, electricity prices increased continuously closely related to rising certificate prices. The oligopolistic structure of the German market with four major players owning 90% of the capacities (Bundeskart...

"...it is clear that RTOs are needed to resolve impediments to fully competitive markets." 2 The Commission identified the key role of RTOs in supporting competitive electricity markets. No matter what the name or governance structure, there must be an organization responsible for key coordination activities needed to make a market work. This is not an option, and the market cannot solve the pr...

This paper introduces an application of financial risk management methods to the deregulated electricity markets. A framework for the Monte Carlo performance simulation of a power portfolio is presented. The optimal portfolio selection problem is addressed and a numerical method is implemented. Numerical results of simulation and optimization are presented in the Nordic electricity market. The ...