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    Contracting for the second best in dysfunctional electricity markets

    Nikandrova, Arina and Steinbuks, J. (2017) Contracting for the second best in dysfunctional electricity markets. Journal of Regulatory Economics 51 (1), pp. 41-71. ISSN 0922-680X (Print) 1573-0468 (Online).

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    Power pools constitute a set of sometimes complex institutional arrangements for efficiency-enhancing coordination among power systems. In many developing countries, where such institutional arrangements can't be established over the short term, there still can be scope for voluntary electricity-sharing agreements among power systems. Using a particular type of efficient risk-sharing model with no commitment we demonstrate that second-best coordination improvements can be achieved with low to moderate risks of participants leaving the agreement. In the absence of an impartial market operator who can observe production fluctuations in connected power systems, establishing quasi-markets for trading excess electricity helps to achieve some cooperation in mutually beneficial electricity sharing.


    Item Type: Article
    Additional Information: The final publication is available at Springer via the link above.
    Keyword(s) / Subject(s): Electricity trade, Risk sharing arrangements, Self-enforcing contracts
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Arina Nikandrova
    Date Deposited: 12 Jan 2017 15:51
    Last Modified: 11 Jun 2021 11:42


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