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Provedor de dados:  31
País:  United States
Título:  Spot, Bilateral and Futures Trading in Electricity Markets. Implications for Stability
Autores:  Termini, Valeria
Cavallo, Laura
Data:  2007-04-11
Ano:  2007
Palavras-chave:  Marketing
Resource /Energy Economics and Policy
Resumo:  The design of wholesale electricity markets in the transition towards liberalization presents significant differences from country to country. Some spot markets have imposed the concentration of transactions to ensure market liquidity. Other markets are based on bilateral trading. The debate about the optimal trading mechanism mainly concentrates on how to deal with the trade off between the liquidity of the market and the stability of the system. The solution chosen by some market is a mandatory pool with a regulated market for electricity derivatives, that allows to hedge price volatility and to mitigate market power. This paper investigates whether, in the presence of a futures market, spot and bilateral trading can operate together and what are possible outcomes in terms of liquidity of the spot market and stability of the system. The paper extends existing literature on the role of futures market on the behavior of spot market prices, developing a multi-period model in which electricity consumers can choose whether to trade on the spot market or negotiate bilateral contracts. Results suggest that a spot market with futures contracts and a market for bilateral contracts are not necessarily alternative ways to manage stability problems, but may co-exist with positive and synergic outcomes on price behaviors and market power.
Tipo:  Working or Discussion Paper
Idioma:  Inglês
Identificador:  25645
Editor:  AgEcon Search
Relação:  Fondazione Eni Enrico Mattei (FEEM)>International Energy Markets Working Papers
IEM Nota di Lavoro 19.2007
Formato:  34


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