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A Smart Market for the Spot Pricing and Pricing of Transmission Through a Power Grid

Chao, Hung-Po and Plott, Charles R. (2008) A Smart Market for the Spot Pricing and Pricing of Transmission Through a Power Grid. In: Handbook of Experimental Economics Results. Vol.1. Elsevier , Amsterdam, pp. 710-718. ISBN 9780444826428. https://resolver.caltech.edu/CaltechAUTHORS:20140317-150953444

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Abstract

This chapter illustrates a mechanism capable of competitively allocating power through an electricity network in which "loop flow" and the unusual economic phenomenon caused by loop flow are anticipated and integrated into the competitive process. At the base of the complexity is Kirchoff's law governing electricity flow through power grids. This physical law creates a form of externalities throughout a power transmission network and these externalities must be incorporated into any efficient and decentralized pricing mechanism. The mechanism developed here is a special, continuous double auction in which buyers and sellers are in essence buying and selling differentiated products in the sense that they wish to purchase and sell power at different locations, but the purchasing and selling activities are technically related through resource limitations and the physical law of electricity flow.


Item Type:Book Section
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1016/S1574-0722(07)00075-3DOIUNSPECIFIED
http://www.sciencedirect.com/science/article/pii/S1574072207000753PublisherUNSPECIFIED
Additional Information:© 2008 Elsevier B.V.
Record Number:CaltechAUTHORS:20140317-150953444
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140317-150953444
Official Citation:Hung-Po Chao, Charles R. Plott, Chapter 75 A Smart Market for the Spot Pricing and Pricing of Transmission Through a Power Grid, In: Charles R. Plott and Vernon L. Smith, Editor(s), Handbook of Experimental Economics Results, Elsevier, 2008, Volume 1, Pages 710-718, ISSN 1574-0722, ISBN 9780444826428, http://dx.doi.org/10.1016/S1574-0722(07)00075-3. (http://www.sciencedirect.com/science/article/pii/S1574072207000753)
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44368
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:19 Mar 2014 15:13
Last Modified:03 Oct 2019 06:17

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