Abstract
In the 1990’s, we are witnessing a period in which competitive forces are sweeping across the electric power industry around the world. A central issue as more of the market becomes subject to competition is the design of an efficient and robust market organization, a task which is complicated by some unique technological characteristics associated with electric power transmission. An electric power grid differs from other types of networks in that power flows must observe physical laws. This gives rise to the loop flow phenomenon, creating widespread externalities in the markets for electric power, whose complexity only grows with the size of the system. It is widely recognized that these externalities, if not mitigated, will cause inefficient resource allocation.
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Chao, Hp., Peck, S. (1998). An Institutional Design for an Electricity Contract Market with Central Dispatch. In: Designing Competitive Electricity Markets. International Series in Operations Research & Management Science, vol 13. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5547-6_12
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DOI: https://doi.org/10.1007/978-1-4615-5547-6_12
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