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Disruptive technology (DT) has the power to reshape markets and societal structures, necessitating both protection and regulation. This paper aims to examine DT protection and regulation strategies at both micro and macro levels through policy texts. We construct an analysis framework integrating Responsible Research and Innovation (RRI) principles, innovation theory, and DT growth process. Key measures are extracted by content analysis, and dynamic topic model is used to discover evolving policy focuses. The framework is applied to analyze DT policy files of major powers. The results indicate that supply-side policy tools are employed to promote sustainable development in DT innovation, while environmental tools are utilised for early governance to preempt potential risks and innovation damage. The focuses of DT policies exhibit three evolution trends: attenuation, reinforcement, and fluctuation. Protective policies show concentration and coherence, while regulatory policies demonstrate integration and correlation. This study broadens existing perspectives and analytical frameworks, providing valuable insights for DT development and governance. [ABSTRACT FROM AUTHOR]

Promoting the widespread access and integration of new energy generation into existing power markets is a key strategy for China to achieve peak carbon and carbon neutrality. A joint regulatory mechanism composed of government regulators, power generation enterprises, and third-party testing organizations has become an effective way to ensure the stable operation of the power market and safeguard the economic interest of all parties. In order to analyze the key factors affecting the mechanism and improve the regulatory efficiency, this paper constructs a three-party evolutionary game model, explores the motivations of the participants under different strategy choices, and establishes a set of indicator systems for evaluating producers. The evolutionary game model is numerically simulated using the unified dynamics method, and the evolutionary stable strategy analysis is used to reveal how the key parameters affect the outcome of the game and its dynamic process, so as to find out the potential driving factors affecting the strategy choices. The results of the study show that in the early stage of market development, it is crucial to improve the profitability of firms, and the government needs to impose strict penalties and high incentives. As the market gradually matures and becomes more transparent, the government can gradually reduce the level of penalties. At the same time, ensuring accountability mechanisms from higher authorities to the government is key to ensure the effectiveness of regulation. This study provides an important theoretical basis and policy recommendations for constructing a new regulatory structure for the electricity market. [ABSTRACT FROM AUTHOR]

The establishment of a long-term, cross-border market in which forward market coupling and bilateral contracts are developed in an integrated approach is instrumental for the European internal electricity market. We propose the joint energy and transmission right auction (JETRA) mechanism, developed by O'Neill et al., as a solution for long-term cross-border markets in Europe. The main contribution of this research lies in its examination of the underlying market structures for effective JETRA implementation. We compare the institutional setting, market rules, and grid modeling under nodal and zonal pricing systems, adapting JETRA to the flow-based market coupling (FBMC) mechanism that is currently implemented in the European day-ahead market. This adaptation reveals the inherent limitations of FBMC in supporting JETRA, in particular in the long-term auction. We also identify constraints posed by existing European market rules, particularly those that affect the application of multi-settlement rules and the effective timeframe of hedging instruments. In conclusion, our research suggests that transitioning from zonal to nodal pricing is essential for JETRA's effective implementation. Furthermore, a comprehensive market reform is required to seamlessly integrate long- and short-term markets. [ABSTRACT FROM AUTHOR]

Airfares are affected by a variety of factors, but it is less clear which factors are the key determinants and how they interact. Based on a unique transaction level data set, this paper introduces a widely used, machine learning based pricing tool to investigate the airline market segmentation and dynamic price discrimination problems. The empirical results suggest that purchasing time, city distance, market structure, market size, and seat availability are the five most important pricing factors in order. Airlines first partition their markets into an early market and a late market, and split the market further by city distance and other factors. While intertemporal price discrimination explains the majority of fare variations, there are strong indications that airlines use their market power in the late market and charge higher fares on late-arriving consumers (but not on early consumers), in response to extra seats sold. [ABSTRACT FROM AUTHOR]

Many electricity markets in the world have experienced the vertical unbundling where the generation and transmission sectors were separated from a vertically-integrated monopolistic power company. This restructuring could positively impact the productivity of the firms because of intensified competition and enhanced autonomy but could also negatively aect the productivity because of the loss of synergy and scaled economy. By exploiting the vertical unbundling that took place in China in 2003, this study finds that vertical unbundling increased the labour use of the generation firms and the material use of the transmission firms. Additional investigation reveals that generation firms suffer from an efficiency loss in labour use due to the loss of coordination after vertical unbundling and the transmission firms face an increased transaction cost in acquiring material and bear the additional cost transferred from the efficiency loss of the upstream generation firms. Our findings suggest that benefits of vertical unbundling relative to integration critically hinge on the market structure of the industry. [ABSTRACT FROM AUTHOR]

This paper proposes a novel approach to optimizing the structure of the electricity market by mitigating market power through the use of forward contracts. The IEEE 30 node test system is used as a case study for the paper, which employs nodal pricing and a Cournot model with recursive optimization. The findings show that forward contracts can reduce market power and lead to a more competitive market structure with fewer participants. The study emphasizes the importance of successor companies having a well-balanced mix of generation technology. Six players with a different generational mix are optimal in the constrained nodal pricing scenario, while five players with slightly different mixes are optimal in the Cournot case study. These findings have important implications for policymakers and industry stakeholders involved in the design and implementation of efficient electricity markets. Market power can be reduced by using forward contracts and establishing an appropriate number of market participants, resulting in more efficient and sustainable electricity markets. Overall, this study provides useful insights for improving electricity market structures and increasing competition in the electricity sector. [ABSTRACT FROM AUTHOR]

• This paper studies the new problem, EVs' provision of flexible ramping products (FRPs). • The dispatching capability of EV fleets is disclosed through the feasible operating region in variable spaces. • A cloud-edge collaborated market structure for the electricity market with FRPs is proposed to facilitate a large amount of EVAs integrated with protected privacy. • A distributed optimal model combining the EVA's bidding subproblem and the market clearing subproblem is established. • The distributed optimal model is solved based on the modified analytical target cascading (ATC), in which the convergence performance is improved through heuristic constraints. • Time-coupled multi-period (TCMP) operation mode is implemented in the market to maximize the dispatching potential of EV fleets. More flexible ramping service is required due to the increase of renewable power generation in power systems. Electric vehicles (EVs) could provide such flexible ramping products (FRPs) at low cost while participating in the electricity market through aggregation. However, EVs' dispatching capability cannot be fully utilized without the right incentives. This paper addresses a distributed optimal model developed between EV aggregators (EVAs) and the independent system operator (ISO). To make such concept, a cloud-edge collaborated market structure is adopted. At the edge level, EVAs assess the dispatching capability and solve the market bidding subproblem. At the cloud level, ISO solves the market clearing subproblem considering system economy and security. The overall problem is solved by the analytical target cascading (ATC) method. Heuristic constraints are also introduced into the model to improve convergence performance. The model is tested on a modified IEEE 30-bus system. Results demonstrate that the proposed method can incentivize EVAs with different owners to shift load and provide FRPs accurately, meanwhile reducing the cost and increasing the consumption of renewable energy effectively. [ABSTRACT FROM AUTHOR]

Countries cautiously observe their banking sector stability by virtue of its vital repercussions. Different researchers used different measures/proxies to investigate stability and its relevance to market structure and power, and mixed evidence was presented. In a dual banking system, the influence of the market structure and power on stability is overlapped given the operation of two different types of banks side by side. This paper uses advanced Z-score (time-varying Z-score and adjusted Z-score) to extend evidence and disentangle the stability linkage between the banking sector, Islamic and conventional banking markets. Quarterly data of 41 commercial banks operating in the Malaysian dual banking sector for the period 2011q4-2020q2 are obtained from FitchConnect database. The study applies the Corrected Least Square Dummy Variable (LSDVC) estimator in the investigation given its superior performance over other commonly used techniques. Diverse important results and conclusions are observed and drawn as in which manner structure and power within the banking sector at large, Islamic and conventional banking markets influence stability of each other, and to which extent the Islamic market is distinguishable and free from the influence of conventional market features. Policy makers and researchers need to be mindful of the used stability proxy and its dynamism. [ABSTRACT FROM AUTHOR]

The conventional model of the day-ahead electricity markets employs an energy-based approach to manage the competition among the players. Under this format, it is assumed that everything (including the demand and output power of the generating units) is constant during each hour. This assumption greatly simplifies the market, and it is widely incorporated over the globe. However, it leads to mismatches in the real-time operation. With the increase in the share of intermittent sources, such mismatches get higher amplitude and become more threatening for market performance and system security. Powerbased modelling of the electricity market (PbM), which has been introduced as a remedy to eliminate mismatches in real-time operation, has been scrutinized. The previous comparisons between the conventional model and PbM generally deploy a rigid approach based on the existence of perfect competition. They assume that all the generation companies offer their maximum capacity and marginal cost into the market. Moreover, they model a single-side auction in which only the supply side is actively involved in the market. In order to develop the previous studies on PbM, an equilibrium environment to model the players' interactions within a competitive market has been employed. Employment of an equilibrium model brings the benefits of modelling a double-side market and can simulate the strategic behaviour of the market players on both sides within a partially competitive electricity market. The equilibrium model provides empirical insight on how changing the market structure to PbM affects players' behaviour and shifts the market equilibrium and provided some unreported attributes of PbM. The study is based on a real-world network of the Gilan province in northern Iran. [ABSTRACT FROM AUTHOR]

This article considers the introduction of Li‐ion batteries in photovoltaic power plants to firm their energy production and analyzes the dependence of their degradation on the structure of the electricity market where the power production is traded. The operation of the batteries is decided as a result of successive optimization problems that benefit from the use of deep‐learning‐based irradiance forecasting tools with low prediction error, which allows the batteries to keep a small size. In addition, state‐of‐the‐art battery aging models are handled to derive a realistic lifetime prognosis. The simulation results obtained by using real data from three European locations, which have different irradiance patterns and market structures, show how the proposed control strategy makes it possible to decouple the saturation rate of the batteries from the climatic conditions of the plant location. Furthermore, regarding the market structure, the results show that the shorter the energy block and the closer the lead time, the lower is the degradation of the batteries. [ABSTRACT FROM AUTHOR]

The decline of fresh‐enrolled students and the increase in the number of dropouts in electrical engineering schools might be related to motivation, engagement and differences in learning preferences. This paper provides a detailed description of the development, application, and evaluation of an online, asynchronous simulation game to teach electricity markets concepts named EMGA. The EMGA aims to introduce students to the short‐term electricity market structure, highlighting the importance of forecasting tools for decision‐making. The EMGA has been deployed in a Master's course with 27 students. The learning effectiveness was assessed with a survey at the end of the exercise. Questions aiming at experience generation, conceptual understanding, skills development and affective evaluation were enquired. Positive results towards experience generation, conceptual understanding and affective evaluation were obtained. Students felt optimistic about the platform's potential. The main complaints from students were their lack of programming experience and the allocated time for the exercise during the course. Results from this small test, along with previously obtained results, are encouraging and might be of potential use for further developing the EMGA and student's experience. [ABSTRACT FROM AUTHOR]

Local electricity markets (LEMs) such as peer-to-peer (P2P) and community-based markets allow prosumers and consumers to exchange electricity products and services locally. In order to coordinate electricity trading and flexibility services, this paper proposes a hierarchical prosumer-centric market framework with a hybrid LEM and a local flexibility market (LFM). Multi-cut Benders decomposition (MCBD) is employed to decompose the integrated hybrid LEM into a centralized P2P market and multiple community-based markets. The aggregators coordinate energy sources and demands of households in low voltage (LV) distribution networks (DN) as virtual power plants (VPPs) and engage in trading through a P2P market over the medium voltage (MV) DN. In addition, a modified MCBD (M-MCBD) approach is proposed to accelerate the convergence process. The LFM is operated by the distribution system operator (DSO) and is formulated as a mixed-integer nonlinear programming (MINLP) problem which is further relaxed to a mixed-integer second-order cone programming (MI-SOCP) problem. The case study demonstrates that aggregators were able to collaborate on trading within the hybrid LEM to minimize the costs incurred by prosumers within the network. Furthermore, the proposed M-MCBD method improves the scalability of the MCBD by enhancing its convergence speed and accuracy, as demonstrated by testing on problems of varying scales. • A hierarchical market framework is designed comprising a hybrid LEM and an LFM. • The hybrid LEM combines a P2P market and community-based markets with VPPs. • The P2P market and community-based markets are coordinated by a modified MCBD. • The LFM is formulated as an MI-SOCP problem, with VPPs providing flexibility service. • VPPs bid block orders so that the operational characteristics of DERs are captured. [ABSTRACT FROM AUTHOR]

There is robust evidence in the experimental economics literature showing that monopoly power is affected by trading institutions. In this paper, we study whether trading institutions themselves can shape agents' market behavior through the formation of anchors. We recreate experimentally five different double‐auction market structures (perfect competition, perfect competition with quotas, cartel on price, cartel on price with quotas, and monopoly) in a within‐subject design, varying the order of markets implementation. We investigate whether monopoly power endures the formation of price anchors emerged in previously implemented market structures. Results from our classroom experiments suggest that double‐auction trading institutions succeed in preventing monopolists from exploiting their market power. Furthermore, the formation of price anchors in previously implemented markets negatively impacts on monopolists' power in later market structures. [ABSTRACT FROM AUTHOR]

Modular production requires new service provision under the trend of servitization. This paper is to explore the issue of module-based service associated with three different power structurers in a two-echelon supply chain that consists of a module supplier and a manufacturer. The manufacturer considers to delegate its upstream module supplier to provide services for downstream consumers. We divide the market into two types: the price-sensitive market and the service-level sensitive market. Different power structures and market types have a great impact on the service levels, prices and the profitability of each member in the supply chain. When the manufacturer (the supplier) acts as the leader in the supply chain, the module supplier should provide the highest (lowest)-level service and the manufacturer will charge the highest (lowest) price for the bundled product and service. The module supplier can benefit from the service-delegation relationship while the manufacturer will be hurt. There is an opportunity for the module supplier to offer the service, especially when the module supplier is in a dominated position. [ABSTRACT FROM AUTHOR]

Adding renewable energy sources (RES) to an electricity market has an ambiguous effect on wholesale prices. The merit order effect (MoE) has a downward pressure on prices while, with market power, higher inframarginal rents will tend to increase prices. We quantify the interaction of the two effects in the Ontario electricity market. We identify the market power effect by simulating transfers of RES capacity from the fringe to larger firms: these transfers increase prices by up to 24%. We then add RES capacity and allocate it to players with varying levels of market power. Following a net expansion of RES capacity of 5% relative to total capacity, prices decrease by 30% when new capacity is assigned to the fringe, but only by 7% when assigned to the largest firm. Our findings show that the MoE is largely mitigated by market power, hence the importance of the market structure in the design of uniform incentives for RES adoption. [ABSTRACT FROM AUTHOR]

As one of the main strategic port governance tools, port integration has been witnessed worldwide to facilitate regional port development. To examine whether the "interest balance" pattern observed in Chinese coastal region is also followed by the inland ports, this paper extends the work of Chen et al. (2020) by focusing on the implementations of port integration in the six inland provinces along the Yangtze River. A two-step methodological approach is adopted, including a descriptive analysis and an explanatory analysis. The findings suggest that a diversified implementation of port integration indeed exists on the Yangtze River and that inland ports follow the "interest balance" pattern. Specifically, institutional flexibility enables tailored implementations, which are characterized by diversity. The market structure and power distribution are recognized as the determinants that lead to the specific trajectories of port integration implementations. Notably, we also find that the geographical distance and the outside-in development model of inland ports can also affect inland port integration. This finding further enriches the "interest balance" pattern. Based on these findings, several general policy implications are proposed for inland port integration in different contexts. [ABSTRACT FROM AUTHOR]

Many markets feature an economic structure in which value is cocreated by multiple producers and aggregated into a common bundle by a producer-consortium or independent firm. Examples include in-home video entertainment, technology goods and services, multisourced data platforms, and patent pools. This paper develops an economic model to study demand, production choices, revenue sharing, and relative market power in such markets. Producers in these markets are not rivalrous competitors in the usual zero-sum sense, because output of each casts an externality on production decisions of others and total market demand expands with total output, albeit with diminishing returns. This property allows multiple producers to flourish in equilibrium (versus just one with the most favorable technological or cost structure), and more so when the market expands less quickly with total output. Equilibrium production quantities of competitors are strategic complements, yet competition between producers does manifest itself, for example, if one acquires better production technology (i.e., makes value units at lower cost) then the equilibrium production levels of other producers are reduced. Insights are also derived for alternative market structures, for example, producers have more output and earn higher profit when organized into a distribution consortium (e.g., Hulu or consortia of zoos or museums) versus relying on a separate retailer. Mergers between producers have similar effect. The formulation enables us to rigorously answer economic questions ranging from pricing, revenue sharing, and production levels in a static setting, to market dynamics covering both the causes and effects of changes in industry structure. This paper was accepted by Chris Forman, information systems. [ABSTRACT FROM AUTHOR]

Local electricity markets are emerging as a viable solution to overcome the challenges brought by the large penetration of distributed renewable generation and the need to put consumers as central players in the system, with an active and dynamic role. Although there is significant literature addressing the topic of local electricity markets, this is still a rather new and emerging topic. Hence, this study provides an overall view of this domain and a perspective on future needs and challenges that must be addressed. This review introduces the most important concepts in the local electricity market domain, provides an analysis on the different policy and regulatory framework, exposes the most relevant worldwide initiatives related to the field implementation, and scrutinizes the alternative local market models proposed in the literature. The discussion puts forth the main benefits and barriers of the currently proposed local market models, and the expected impact of their widespread implementation. The review is concluded with the wrap-up and discussion on the most relevant paths for future research and development in this field of study. [Display omitted] • A review that identifies and discusses the different proposed approaches regarding local electricity market structures. • A proposed classification for the local electricity market structures, attending the similarities in the material analyzed. • An analysis of regulation that, from the perspective presented, encourages the creation of the local electricity market. • A survey of projects and pilots that address the local electricity market application is presented. • Quantifying benefits and barriers are presented, attending to the similarities in all considered publications. [ABSTRACT FROM AUTHOR]

This paper is an exploratory study on the Bangladesh and Thailand rural electricity transition. This study compares the Bangladesh microgrid policies with that of Thailand microgrid policies. The comparative study in several areas considers electricity security, electricity access, environmental sustainability, economic development and growth of the countries. Public data related to microgrid policies in Bangladesh and Thailand had been collected, analyzed and discussed. The comparative case brings out the significant differences while also exploring the range of possible synergies across different dimensions and sectors. Concisely, the transition of rural electricity, driven by microgrid policy in both countries can be achieved by adopting new electricity market structure and regulation. The private sector would play a key role in electricity generation. [ABSTRACT FROM AUTHOR]

The paper studies the ongoing regulatory, institutional and organisational developments in EU energy sector during the last two decades that change the way electricity markets operate. In particular, it addresses the EU efforts in creating competitive and sustainable electricity markets. Its aim is to explore the effects of the reform on market competition and electricity price evolution. The paper firstly presents the specific aspects of the electricity market, which helps to understand its overall functioning. The current electricity market structure, participants behaviour and market performance are discussed. The analysis presents the contradictions between the EU energy and climate targets and their adverse impact on end-consumers, who are stated as the main beneficiaries of the reform. The study comes to the conclusion that the persistence of shortcomings in the electricity market defined by policy deficiencies at an EU level and diverging energy policies at a Member State level requires further efforts to make national markets work as a single European energy market with common rules and prices. [ABSTRACT FROM AUTHOR]

Inverse equilibrium modeling fits parameters of an equilibrium model to observations. This allows investigation of whether market structures fit observed outcomes and it has predictive power. We introduce a methodology that leverages relaxed stationarity conditions from Karush-Kuhn-Tucker conditions to set up inverse equilibrium problems. This facilitates reframing of existing equilibrium approaches on power systems into inverse equilibrium programs. We illustrate the methodology on network-constrained and unconstrained Nash-Cournot games between price-making power generators. The inverse equilibrium problems in this paper reformulate into linear programming problems that are flexible and interpretable. Still, inverse equilibrium modeling provides generally inconsistent estimation and econometric approaches are better for this purpose. [ABSTRACT FROM AUTHOR]

The article traces the development of "spot pricing" for electrical power, which has provided the technique for calculating electricity prices in wholesale markets in most of the United States, and is rapidly becoming the standard in many other countries. The model was first formalized by a group of engineers and economists associated with the engineering professor Fred Schweppe, at MIT. From his position as a leading control theorist, well known in the industry, Schweppe proposed an expansion of control theory that he argued would help break the deadlock in regulatory politics and benefit producers and consumers of power alike. He introduced the approach, which he called "homeostatic control," around 1978 in a seminar of the MIT Energy Lab. Derived by way of a biological metaphor, homeostatic control conceives of a self-correcting system that maintains its equilibrium state in the face of a changing environment. Schweppe's group envisioned bringing consumers of power into the control system by constantly feeding them signals in the form of prices. The MIT team discovered through the contact between economists and engineers that the calculation for determining efficient prices is identical to the calculation used by engineers for meeting system load while minimizing costs. The Lagrange multipliers, or lambdas, derived from the engineering optimization are the best estimates of the marginal cost, and therefore the efficient prices, at each node of the system. [ABSTRACT FROM AUTHOR]

The article studies the development of the long-term marginal cost pricing of electricity in France, in the 1950s and 1960s. The engineers who managed the public monopoly for the production, transport, and distribution of electricity promoted a distinctive version of the economics and engineering nexus. Costs calculations were developed to design a nationwide integrated machine. Hydropower in the south was to be interconnected with thermal power in the north, in order to support a massive increase in consumption in the Paris basin, saving on coal and on the scarce funding of the Marshall Plan. Prices acted as administrative instructions, passing on costs to subscribers and shaping their present and future behavior according to the planned development of the system. This was a technocratic intervention: the engineer-economists made crucial and lasting decisions on land-use planning for the sake of the rapid growth of the system. This engineering and economics nexus was a far cry from the prewar liberal order made of multiple small and loosely regulated competitors, and from contemporary forms of economic engineering, more narrowly focused on the informational properties of prices, abandoning the calculated nationwide decisions on the growth of processes of production and uses. It is also slightly neglected in the discussion over the so-called indicative planning in postwar France. [ABSTRACT FROM AUTHOR]

This paper investigates a pricing game and service cooperation for complementary products in a dual-channel supply chain composed of two manufacturers and one retailer. The products of the two manufacturers are complementary products. One manufacturer sells products simultaneously through its own online channel and the traditional retailer, and the manufacturer delivers the product's service to the retailer in its network direct sales channel by cooperating with the retailer in the form of service cost sharing. Considering the different market power structures of channel members, we establish three different pricing game models. By using the backward induction method and game theory, we obtain the corresponding analytical equilibrium solutions. Then, the service cooperation strategy of using the channel service sensitivity coefficients to construct the weight to share the service cost is proposed. Finally, numerical examples of optimal pricing strategies and profit conditions in different game situations are given, and sensitivity analysis of some key parameters is selectively performed, in which some valuable management insights are obtained. [ABSTRACT FROM AUTHOR]

Electricity is central to socioeconomic growth and development of any economy. And, the electrical power sector of many economies has witnessed reforms in recent time, transforming into competitive and or oligopolistic market structure. In any case, energy pricing subsist as a challenge across the power value chain. This study focused identifying the determinants of market power of energy distributing operation and rural area consumers in the power retail market in Nigeria’s present oligopolistic power market structure. Adopting a production function model and econometric analysis of selected power sector time series variables between 2000-2017, the study discovered that electrical power generation, rural electricity access and energy consumption in Nigeria are though essential but do not ultimately and significantly determine market power of competing firms in the electric power market in Nigeria. It is concluded that evidence of the importance of market power for competing firms in the electric power conduct in terms of energy pricing and cost decisions is auspicious considering their prevailing market challenges. The study therefore recommend amongst others for exclusive regional or sub regional power chain structural transformation of Nigerian electrical power in order to help build efficient and effective energy supply thereby elicit information/data for control, improvement, competition and researches in the sector while Future research on market power in electrical power market is encourage on assumptions. [ABSTRACT FROM AUTHOR]

We examine how forward contracts affect economic outcomes under generalized market structures. In the model, forward contracts discipline the exercise of market power by making profit less sensitive to changes in output. This impact is greatest in markets with intermediate levels of concentration. Mergers reduce the use of forward contracts in equilibrium and, in markets that are sufficiently concentrated, this amplifies the adverse effects on consumer surplus. Additional analyses of merger profitability and collusion are provided. Throughout, we illustrate and extend the theoretical results using Monte Carlo simulations. We discuss the practical relevance for antitrust enforcement. [ABSTRACT FROM AUTHOR]

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The electric power industry is undergoing dramatic change driven by rapid technological transformation, concern over climate change, and evolving market structures. As a result, there is a need for new models to help the industry better utilize resources in a time of increasing uncertainty and to help government policy makers better understand the impacts of their regulatory decisions. We provide a structured review of the operations research and management science literatures to describe the current operational and policy issues in the electric power industry, with a particular focus on issues surrounding electricity market design, renewable integration, effects of climate policy on electric power infrastructure, rise of electric powered vehicles, energy storage, and the growing interdependence between natural gas and electric power sectors. We identify the current research frontier and classify the existing research into clusters with respect to managerial issues addressed. We offer a forecast for where the electric power industry is going and describe some important public policy issues. Finally, we highlight research opportunities and discuss how the management science community can contribute by considering the interaction between operational considerations and electric power policy. [ABSTRACT FROM AUTHOR]

To achieve the carbon-neutral goal set for 2060, China has promoted renewable energy development for more than two decades. Meanwhile, China's electricity market is undergoing a new round of reform by introducing more market-oriented mechanisms and changing the market structure. This paper investigates the impact of three electric utility market structures experimented with in China on promoting renewable energy through a simulation model. The three market structures are vertical monopoly, weak monopoly (separation of power generators and grids), and monopolistic competition (Cournot-Nash competition). The model is calibrated with the actual data of the regional utility network in Beijing, Tianjin, and Tangshan areas. The simulation results show that the electricity market structure plays a vital role in renewable electricity, and the competition among utilities tends to benefit renewable energy development (wind power here). The study's conclusions are helpful to our understanding of further reforms in the electric utility industry and the long-term clean energy target in China. [ABSTRACT FROM AUTHOR]

This study uses pattern-matching to analyze the tariff recourse policies employed by East African Community (EAC) countries to cushion the distortionary effects of high tariffs. We describe the various tariff recourse policies adopted across the EAC domestic markets and assess their level of regional harmonization given the different market structures each member state operates. We found a sharp disparity in the tariff recourse policies adopted across the EAC. We recommend that EAC countries prioritize reforms that create linear market liberalization and competition growth as part of an overall strategy for accelerating electricity market integration. [ABSTRACT FROM AUTHOR]

While power system organization has evolved from a hierarchical structure to a more decentralized model, electricity markets are still not up to date with the ongoing transformation toward more consumer-centric economies. As information and communication technologies are broadly adopted, they allow prosumers to have a more proactive role in power system operation. This work introduces the concept of energy collectives, as a community-based electricity market structure. We find that when prosumers are allowed to share energy at community level, the overall electricity procurement for the community reflects prosumers’ preferences. We show that community members can be influenced by a supervisory third-party in charge of interfacing with the market and system operator and of guaranteeing the collective common agreements. We simulate a number of test cases and apply typical principles from analysis of communication networks and distributed systems to assess community fairness. [ABSTRACT FROM AUTHOR]

This paper introduces a decentralized market design, which allows a distribution system operator to manage local demand constraints by obtaining flexibility from competing aggregators, which must in-turn incentivize prosumers to provide this flexibility. The novel networked market structure accounts for distribution system operator-to-aggregator and aggregator-to-prosumer ICT infrastructure and contractual arrangements, which may limit which participants can negotiate transactions with one another. The proposed flexibility market is opt-in for prosumers, which continue to obtain energy within the existing retail electricity market. At the same time, it is underpinned by bilateral energy transactions, and could be integrated into future peer-to-peer electricity markets. Through the market, the distribution system operator, aggregators, and prosumers reach agreement on a stable outcome–a set of individually beneficial transactions no group wishes to mutually deviate from. Market outcomes also satisfy Pareto efficiency, meaning that it is not possible to make a participant better off, without making another worse off. [ABSTRACT FROM AUTHOR]

There is an ongoing debate on the introduction of capacity markets in most European countries while a few of them have already established capacity markets. Since the implementation of independent national capacity markets is not in line with the target of a pan-European internal electricity market we investigate the impacts of uncoordinated capacity markets compared with coordinated capacity markets. A probabilistic approach for the determination of capacity requirements is proposed and a European electricity market model (E2M2s) is applied for evaluation. The model simultaneously optimizes investments and dispatch of power plants. Besides the impact on generation investments, market prices and system costs we analyze effects on production and security of supply. While coordinated capacity markets reveal high potentials for cross-border synergies and cost savings, uncoordinated and unilateral implementations can lead to inefficiencies, in particular free riding effects and endanger security of supply due to adverse allocation of generation capacity. [ABSTRACT FROM AUTHOR]

• A new design of an integrated heat and power market for connected energy hubs. • Security analysis for the electrical system under the heat market evolution. • A combined model of reserve scheduling and heat and power trading for energy hubs. • Study the effects different heat market for P2P, centralized, and compelete models. According to the development of Combined Heat and Power (CHP) units, and energy converter equipment such as Heat Pumps (HP), energy scheduling of thermal and electrical systems became more dependent on each other. Multi-energy systems with new technologies require new designs as Integrated Heat and Power Markets (IHPM) to use the complementary capabilities of multi-energy systems such as Energy Hubs (EH). In this regard, a decentralized market structure is provided to make the opportunity of trading heat and power bilaterally for connected EHs of the distribution system under an integrated market framework. The proposed market structure based on the ADMM improves the social welfare value, reduces the operating costs, and considers the privacy-preserving requirements for the market clearing process. Results analysis indicates that P2P energy trading enables the use of complementary capabilities of EHs, and also reduces the required reserve margin of each entity. According to the obtained results, the evolution of the IHPM would increase the line loading of the power system by up to 28%, which can lead to line congestion if the security constraints of the system not be considered in the electrical market design. The convergency and optimality of results are validated by a centralized model. [ABSTRACT FROM AUTHOR]

• A standardized nomenclature for electricity market design comparison. • An international benchmark based on physical characteristics and market mechanisms. • Short- and long-term markets aspects are considered in the comparisons. • Recommendations for the Brazilian electricity market based on selected benchmarks. • Transitioning from centralized and bid-based markets is discussed. The Brazilian power-market design features were based on the system's physical and economic characteristics in the '90s. However, some of the approximations and assumptions adopted for the regulatory framework are no longer valid. Failing to adapt the regulatory framework to the current system and economic reality may provide poor market signals, possibly threatening the sustainability and supply adequacy of the long-run system. Despite the national consensus on the need for modernization, there are still many concerns about which changes should be carried out. The vast literature and international experience in the subject notwithstanding, each system's par- ticularities challenge any simplistic attempt to match the Brazilian case with previously reported experiences. Thus, this work aims to 1) define a general market design nomenclature and clas- sify relevant market structures, 2) draw a systematized panorama of the physical characteristics that have influenced the selection of different market designs and mechanisms, and 3) compare the Brazilian market design, to the international experience. Based on that, we contribute with an updated and standardized panorama of a few relevant market designs and structures. Addi- tionally, we raise awareness and discuss the lessons from the international experience applicable to support and foster the Brazilian market modernization agenda. [ABSTRACT FROM AUTHOR]

• Electricity market structures and final users dictate solar forecast verification metrics. • Tailor-made verification metrics might be needed to optimize value. • The value of solar forecasting is market-dependent. [ABSTRACT FROM AUTHOR]

As variable renewable wind and solar resources constitute a larger fraction of electricity supply, interest in flexible resources, including demand response, dispatchable generation, transmission interconnection, and storage technologies is growing. This paper evaluates the utility of storage assets given different electricity system configurations, market paradigms, and management schemes using a production cost model. When a large share of non-renewable generation is derived from inflexible sources, storage is imperative even at relatively low renewable penetrations. At high renewable penetrations, storage becomes increasingly important in flexible systems as well. In addition to renewable penetration, storage utilization rates are sensitive to the storage assets' market bidding structure and ownership paradigm, particularly in inflexible electricity systems. Storage assets consume during low-cost hours and generate during high-cost hours, regardless of bidding structure, but the price delta is largest for a centrally-controlled storage asset bidding with a price arbitrage motive. Storage utility cannot be deduced from an individual metric, but rather depends on the interaction between bidding mechanism, renewable penetration, and system flexibility. [ABSTRACT FROM AUTHOR]

A review of capacity markets in the United States in the context of increasing levels of variable renewable energy finds substantial differences with respect to incentives for operational performance, methods to calculate qualifying capacity for variable renewable energy and energy storage, and demand curves for capacity. The review also reveals large differences in historical capacity market clearing prices. The authors conclude that electricity market design must continue to evolve to achieve cost-effective policies for resource adequacy. [ABSTRACT FROM AUTHOR]

Electricity markets are designed to provide reliable electricity at least cost to consumers. This paper describes how the best designs satisfy the twin goals of short-run efficiency—making the best use of existing resources—and long-run efficiency—promoting efficient investment in new resources. The core elements are a day-ahead market for optimal scheduling of resources and a real-time market for security-constrained economic dispatch. Resources directly offer to produce per their underlying economics and then the system operator centrally optimizes all resources to maximize social welfare. Locational marginal prices, reflecting the marginal value of energy at each time and location, are used in settlement. This spot market provides the basis for forward contracting, which enables participants to manage risk and improves bidding incentives in the spot market. There are important differences in electricity markets around the world, reflecting different economic and political settings. Electricity markets are undergoing a transformation as the resource mix transitions from fossil fuels to renewables. The main renewables, wind and solar, are intermittent, have zero marginal cost, and lack inertia. These challenges can be met with battery storage and improved demand response. However, good governance is needed to assure the market rules adapt to meet new challenges. [ABSTRACT FROM AUTHOR]

• We used EMIS-AS model to explore various market structures and clean energy targets. • Energy-only markets can achieve same clean energy goals as capacity markets. • ORDC scarcity pricing exhibits substitutional relationship with capacity markets. • Even one well-designed market mechanism can achieve desired clean energy targets. • Capacity/reserve eligibility rules for one technology or product can impact others. Competitive wholesale electricity markets can help facilitate energy system decarbonization by incentivizing investments in clean energy technologies that meet evolving system needs. We explore market structure impacts on generator operations and deployment by risk-averse, heterogeneous investor firms using the Electricity Markets and Investment Suite – Agent-based Simulation (EMIS-AS) model. We apply clean energy targets of 45%–100% by 2035 considering energy, ancillary services, capacity, and clean energy credit products and pricing and eligibility rules. Results highlight a complexity conundrum, whereby finding the "right" market design to achieve decarbonization goals and avoid unintended consequences can be a highly-nuanced, non-incremental challenge. Carefully designed energy-only markets can achieve the same clean energy targets as capacity market structures but with different revenue and profitability outcomes. Operating reserve demand curve-based scarcity pricing can substitute capacity markets for similar deployment outcomes. Carbon pricing alone is most effective at achieving decarbonization levels at low clean energy targets, and clean energy credit markets and carbon pricing are substitutionary at high clean energy targets. Restricting technology participation in capacity and operating reserve markets can impact deployment and operations, even for nonrestricted technologies. Adding an inertia product with fast frequency response yields insufficient provision at high clean energy targets, but work is needed to understand frequency requirements and capabilities. [ABSTRACT FROM AUTHOR]

We propose an inverse optimization-based methodology to determine market structure from commodity and transportation prices. The methods are appropriate for locational marginal price-based electricity markets where prices are shadow prices in the centralized optimization used to clear the market. We apply the inverse optimization methodology to outcome data from the Midcontinent ISO electricity market (MISO) and, under noise-free assumptions, recover parameters of transmission and related constraints that are not revealed to market participants but explain the price variation. We demonstrate and evaluate analytical uses of the recovered structure including reconstruction of the pricing mechanism and investigations of locational market power through the transmission constrained residual demand derivative. Prices generated from the reconstructed mechanism are highly correlated to actual MISO prices under a wide variety of market conditions. In a case study, the residual demand derivative is shown to be correlated with coefficients of certain transmission constraints. The online appendix is available at . [ABSTRACT FROM AUTHOR]

• A distributed operation optimization model of a large-scale distribution network with peer-to-peer (P2P) electricity trading is proposed. • A network partitioning method based on dynamic reconfiguration in the distributed manner is studied to improve the computation efficiency. • A proxy entity for distribution network is addressed to help the coordination between the electricity trading and the operation of ADNs. • The network usage price can be adjusted to reach the balance between P2P electricity trading maximization and distribution network security. With the increasing integration of distributed generators and the rapid development of electricity markets, active distribution networks (ADNs) confront new challenges in operation optimization. Centralized optimization methods usually aggravate the computational burden when applied to large-scale distribution networks (DNs). A distributed operation optimization model incorporating peer-to-peer (P2P) electricity trading in a blockchain environment is proposed in this paper, where network usage fees considering electrical distance are specially addressed. Meanwhile, the private information security of prosumers is ensured by the Proof-of-Authority (PoA) consensus blockchain during P2P electricity trading. The trading information of adjustable prosumers should be sent to the proxy entity authorized by the DN using the blockchain platform. In addition, a network partitioning method via dynamic reconfiguration considering multi-level switching is offered to adapt to the required distributed manner. The operation network, as well as the corresponding market structure can be automatically updated according to the results of dynamic reconfiguration. Moreover, the unit price of network usage fees can be adjusted to derive a higher amount of P2P electricity trading with security constraints. Case studies on a practical 148-bus system and a 297-bus system verify that the proposed model maximizes the profits and reduces the computational time in the distributed operation optimization. [ABSTRACT FROM AUTHOR]

This paper looks at the empirical and theoretical background to high shares of renewables in the electricity system. First we examine what is meant by "high shares" of renewables; next we consider what we mean by electricity "markets"; then we discuss what the term "cope with" implies; before returning to the suitability of "current" electricity markets. Second, we turn to three examples of jurisdictions--Germany, the UK and the State of New York in the US--with specific aspirations for decarbonisation and the role of renewables. Each exhibits very different approaches to the way they are adjusting their electricity market design to cope with high shares of renewables. We suggest that a new wave of electricity experiments is beginning around the theme of how to incorporate large shares of intermittent renewable generation in to electricity systems. [ABSTRACT FROM AUTHOR]

With changes to carbon output imminent as a result of governmental policies, the method by which energy generators in competitive markets are selected for operation can be called into question. We first simulated a bid-based day-ahead market with human participants and then analyzed generation asset owners’ profits based on bid strategy. We then studied computing generator unit dispatch for this simulated market by introducing an environmental index related to the carbon intensity of the relevant fuel type, and computing dispatch via linear programming to either maximize or minimize this index subject to the constraint that average profits be the same as in the original market simulation. The results show that lower bids, even below cost, are most profitable for generators, and that adding an environmental weighting to the bid process has the potential to reduce carbon intensity of power generation without reducing overall average profitability to generators or increasing cost to consumers. This research concludes an environmental score should be explored as a potential weighting factor in bid-based electricity market dispatch. [ABSTRACT FROM AUTHOR]

The contradiction between the independent operation and inner connection of the power market, carbon market and TGC market have become the primary challenge towards developing renewable energy and low-carbon technologies. This paper proposes a day-ahead collaborative power-carbon-TCG market framework and its implementation methodology based on the cross-chain technology to cope with the challenge. The daily collaborative market is designed to operate sequentially to reflect the time attribute of carbon emission and TGC production. Penalty factors are introduced in the power market to indicate the inter-market influences from the carbon and TGC markets. Furthermore, cross-chain technologies are leveraged to form a unified framework for the coordination of the three markets, and the chain structures of each market are redesigned to fit into the unified framework. The conclusion is drawn from the case studies on the modified IEEE-30 bus system. The results indicate that the total carbon emission of the system is reduced under the collaborative market framework. The market shares and profits of low-emission and renewable units increase vastly, benefiting low-carbon and renewable energy companies in the long term. • Established a day-ahead collaborative market framework for power, carbon and tradable green certificate (TGC). • Introduced penalty factors in the market clearance to indicate inter-market influences. • Developed a heterogeneous multi-chain structure for the market framework. • Redesigned the blockchain structures for each market for practical use. [ABSTRACT FROM AUTHOR]

• A large-scale active distribution network operation management model with peer-to-peer (P2P) trading is proposed. • Network usage fees considering electrical distance are specially addressed. • The trading agent is introduced to manage the prosumers' trading to simplify the P2P market management. • This operation management model is easy to adapt to the active distribution network reconstruction. With the steady development of electricity trading market, active distribution networks (ADNs) need to face new challenges in operation management. Meanwhile, the traditional operation management with peer-to-peer (P2P) trading leads to a heavy computational burden due to a great number of prosumers. An operation management model for large-scale distribution networks integrated with P2P trading is proposed in this paper, where network usage fees are specially addressed. To simplify the management of the P2P trading market, the trading agent is introduced into the P2P trading platform. In addition, this model is adaptive to the reconfiguration of ADN, so the operation management system and the corresponding market structure can be automatically updated according to the new network topology. As shown in case studies, the total trading amount in the P2P trading market can increase by about 62MWh by adjusting the unit price of network usage fees, and the computational time can decline by about 77% in a practical-scale 152-bus system. Also, the total trading amount can be doubled approximately, and the computational time can be reduced by about 85% in the IEEE 8500-bus system. [ABSTRACT FROM AUTHOR]