In the restructured electricity industry, electricity pooling markets are an oligopoly with strategic producers possessing private information (private production cost function). We focus on pooling markets where aggregate demand is represented by a non-strategic agent. We consider demand to be elastic. We propose a market mechanism that has the following features. (F1) It is individually ratio...

We study an offline scheduling problem arising in demand response management in smart grid. Consumers send in power requests with a flexible set of timeslots during which their requests can be served. For example, a consumer may request the dishwasher to operate for one hour during the periods 8am to 11am or 2pm to 4pm. The grid controller, upon receiving power requests, schedules each request ...

This paper presents estimates of the variable cost function of electricity generation. The cost function is estimated using a two dimensional definition of capacity utilization. Because electricity cannot be conveniently stored, generation facilities follow the load across demand cycles. Capacity utilization can be captured empirically in two ways. One is generation relative to capacity when a ...

Several demand response (DR) strategies rely on real-time pricing and selfish local optimization, which may not result in optimal electricity consumption patterns from the viewpoint of an energy supplier or a power system. Thus, this paper proposes a strategy enabling centralized adjustments to cost-minimize consumers’ load. By employing the strategy, an aggregator is able to alter electricity ...

We model long-run electricity supply and demand for the western United States. We evaluate the costs of carbon-reducing and water-conserving scenarios. Carbon-reducing scenarios become cost-effective at carbon prices of $50–70 per ton CO2. Water-conserving scenarios are only cost-effective above $4000/acre-foot of water. Electricity planning is central to climate policy, but much less so to wat...

In many European countries, natural gas-fired power plants are considered a possibility to quickly compensate the expected shortfall in electric energy supply. Increasing gasfired generation capacity would also increase the couplings and interactions between gas and electricity systems. So far, gas power plants participate in two different markets gas and electricity. Coupling these markets by ...

Given the agreed urgency of decarbonizing electricity and the need to guide decentralized private decisions, an adequate and credible carbon price appears essential. The paper defines and quantifies the useful concept of the break-even carbon price for mature zero-carbon electricity investments. It appears an attractive alternative given the difficulty of measuring the social cost of carbon, bu...

In the present paper, and agent based model is developed to balance the electric storage in a Hybrid Power Grid, where each house (end user) is modeled as an agent that can choose to store/release electricity at given times in order to tail the demand minimizing its own cost. The overall interaction of the agents causes the demand curve to change according to the decisions taken by the agents i...

This paper examines a California-based microgrid’s decision to invest in a distributed generation (DG) unit fuelled by natural gas. While the long-term natural gas generation cost is stochastic, we initially assume that the microgrid may purchase electricity at a fixed retail rate from its utility. Using the real options approach, we find a natural gas generation cost threshold that triggers DG...