Capacity Choices in Liberalized Electricity Markets

Publication:
Capacity Choices in Liberalized Electricity Markets

dc.affiliation.dpto	UC3M. Departamento de Economía	es
dc.contributor.author	Marín, Pedro L.
dc.contributor.author	Castro Rodríguez, Fidel
dc.contributor.author	Siotis, Georgios
dc.contributor.other	CEPR
dc.date.accessioned	2009-10-05T09:31:58Z
dc.date.available	2009-10-05T09:31:58Z
dc.date.issued	2001
dc.description.abstract	We develop a theoretical model of long-run investment decisions on capacity in the context of a liberalized electricity market. The sector’s idiosyncrasies such as the uncertainty surrounding future supply and demand, as well as technological constraints, are explicitly modelled. The model is sufficiently flexible to describe the situation in different systems. We derive the level of capacity that maximizes social welfare, and compare it to a decentralized outcome. We show that in the absence of any regulation, private investment decisions on capacity unambiguously lead to a socially sub-optimal outcome, and we illustrate these results using simulations.
dc.format.mimetype	application/pdf
dc.identifier.uri	https://hdl.handle.net/10016/5365
dc.language.iso	eng
dc.relation.ispartofseries	Working paper
dc.relation.ispartofseries	2998
dc.rights.accessRights	open access
dc.subject.eciencia	Economía
dc.subject.other	capacity
dc.subject.other	electricity
dc.subject.other	liberalization
dc.subject.other	long-run investment and regulation
dc.title	Capacity Choices in Liberalized Electricity Markets
dc.type	working paper	*
dspace.entity.type	Publication

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