Equilibria in Electric Power Exchange Auction Markets

Tuesday, December 5, 2000 - 10:00am - 11:00am
Keller 3-180
John Birge (Northwestern University)
Deregulated electric power markets have been increasingly transformed into auction clearing houses. We will describe the structure of these markets and the forms of equilibria that can exist. We will give characterizations of equilibria in simple stylized markets and illustrate conditions that produce apparent paradoxes such as declining prices during periods of high demand. We will also discuss some experience with the market in Colombia and the difficulties in using pure optimization procedures in predicting auction behavior or devising bidding strategies.