Title
Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets
Campus Units
Economics
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
11-2018
Journal or Book Title
IEEE Transactions on Power Systems
Volume
33
Issue
6
First Page or Article ID Number
6870
Last Page
6882
DOI
10.1109/TPWRS.2018.2832471
Abstract
This study investigates the effects of dynamic-price retail contracting on integrated retail and wholesale (IRW) power market operations. Performance is evaluated by means of carefully defined metrics for system stability and market participant welfare. The study is carried out for an IRW Test Case for which 500 households have price-responsive air-conditioning systems. It is shown that dynamic-price retail contracting can give rise to braided cobweb dynamics consisting of two interwoven cycles for power and price levels exhibiting either stability or instability depending on system conditions. Moreover, even in stable cases, dynamic-price retail contracts generally result in worse welfare outcomes for households than flat-rate retail contracts.
Copyright Owner
IEEE
Copyright Date
2018
Language
en
File Format
application/pdf
Recommended Citation
Thomas, Auswin George and Tesfatsion, Leigh, "Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets" (2018). Economics Publications. 679.
https://lib.dr.iastate.edu/econ_las_pubs/679
Comments
© 2018 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other uses, in any current or future media, including reprinting/republishing this material for advertising or promotional purposes, creating new collective works, for resale or redistribution to servers or lists, or reuse of any copyrighted component of this work in other works. doi: 10.1109/TPWRS.2018.2832471.