Electricity market mechanisms designed to steer sustainable generation of electricity play an important role for the energy transition intended to mitigate climate change. One of the major problems is to complement volatile renewable energy sources by operationally flexible capacity reserves. In this paper a proposal is given to determine prices on electricity markets taking into account the op...

We extend a heuristic method within the framework of “dynamic capacity apportionment procedure” (DCAP) to allocate an existing capacity among the classes with different profit contributions. In general, DCAP is applied when some capacity shortage exists and can not be enhanced in short - run. Our proposed approach is constructed for a make - to - order manufacturing system that produces a varie...

In this paper we discuss the problem of power generation capacity adequacy in restructured and competitive power systems and analyse potential regulatory mechanisms to ensure sufficient supply of electricity. In particular, we look at how uncertainty influences the optimal timing of investments in new power generation capacity. We formulate the power generation investment problem for a decentra...

Worldwide the installed capacity of renewable technologies for electricity production is rising tremendously. The German market is particularly progressive and its regulatory rules imply that production from renewables is decoupled from market prices and electricity demand. Conventional generation technologies are to cover the residual demand (defined as total demand minus production from renew...

We analyze endogenous capacity formation in a large frictional market with perfectly divisible goods. Each seller posts a price and decides on a capacity. The buyers base their decision on which seller to visit on both characteristics. In this setting we determine the conditions for the existence and uniqueness of a symmetric equilibrium. When capacity is unobservable there exists a continuum o...

In this article, the energy market is a modeled as a Stackelberg game involving three categories of agents: microgrids made of end users sharing the same energy provider, suppliers and generators. The energy production is decentralized involving non-renewables, renewables and demand response performed at the microgrid level. We compute analytically the Nash equilibrium of the game in the genera...

We analyze oligopolistic exhaustible-resource depletion when firms can trade forward contracts on deliveries, a market structure prevalent in most resource commodity markets. When market interactions become arbitrarily frequent, all stocks are contracted and subgame-perfect equilibrium allocation becomes perfectly competitive. The result is in contrast with the idea that forward markets can hel...