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Investments in flexible generation capacity in an energy-only market

Presented by: 
Bert Willems Universiteit van Tilburg, Université de Toulouse
Date: 
Monday 18th March 2019 - 12:00 to 12:45
Venue: 
INI Seminar Room 1
Abstract: 

A de-carbonized energy system will require sufficient investments in flexible generation capacity. The goal of this paper is to study how market design affects investments in flexible generation capacity.  If markets are perfectly competitive, production costs are convex, and demand is perfectly predictable, then independent energy-only market (one for each hour of operation) will lead to efficient market outcomes both in the short-run (market operation) and in the long-run (investment levels and levels of flexibility). We will relax the assumption of convex production costs and predictable demand and analyze first whether small competitive investors have the right incentives to invest in flexible generation. In a second step we intend to derive equilibrium investment levels. 

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Presentation Material: 
University of Cambridge Research Councils UK
    Clay Mathematics Institute London Mathematical Society NM Rothschild and Sons