Moreno, R., Rudnick, H., Barroso, L., First price and second price auction modelling for energy contracts in Latin American electricity markets, 16th Power Systems Computation Conference 2008, Glasgow, Scotland, July 2008 (2008)

First price and second price auction modelling for energy contracts in Latin American electricity markets

Tipo de publicación : Conferencia No A* ni A

Abstract

The need to stimulate generation investment is a growing challenge in deregulated electricity markets worldwide. Capacity payments and capacity markets have been investigated for this purpose. Latin American markets are exploring energy supply auctions, an avenue that is as-sessed in this paper. Auction mechanisms are studied through auction theory by using Bayesian equilibrium concepts. Two sealed bid auction formats are reviewed: a single object first-price auction and single object second-price auction. These formats are analyzed under a pseudo common value and symmetric equilibrium framework. In order to solve the first order conditions of the program-ming models and to compute the price market, numerical and sampling methods are used as Monte Carlo heuristics. The developed models are applied to assess future auctions in the Chilean electricity market.