Much of the discussion about new markets for electricity contracts focuses on the auction format to be used. Far less attention has been paid to the contract definition itself. An analysis of the 2006 Illinois Electricity Auction shows how a poorly formulated product definition can erode the performance of such markets. The authors propose an improved product definition to overcome the key problems they have identified.
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(Co-authors: Matias Negrete-Pincetic and George Gross)
Abstract:
Much of the discussion about new markets for electricity contracts focuses on the auction format to be used. Far less attention has been paid to the contract definition itself. An analysis of the 2006 Illinois Electricity Auction shows how a poorly formulated product definition can erode the performance of such markets. The authors propose an improved product definition to overcome the key problems they have identified.
Citation:
de Castro, L., Negrete-Pincetic, M. and Gross, G. (2008): “Product Definition for Future Electricity Supply Auctions: The 2006 Illinois Experience,” The Electricity Journal, vol. 21, 7, 50-62.