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Key research themes
1. How do different auction pricing mechanisms impact price volatility, market efficiency, and equilibrium in deregulated electricity markets?
This theme investigates the effects of auction pricing rules—specifically uniform price auctions (UPA) versus discriminatory price auctions (DPA)—on wholesale electricity price volatility, market power exercise, equilibrium existence, and economic efficiency. It addresses how auction design influences bidder behavior, price levels, and surplus distribution in deregulated power markets characterized by demand inelasticity and network constraints. This area matters as auction mechanisms underpin market clearing and price discovery, affecting both market stability and competitiveness.
Key finding: In controlled experimental setups with no unilateral market power, the discriminatory price auction (DPA) greatly reduces price volatility compared to uniform price auctions (UPA), but results in prices converging to levels... Read more
Key finding: Demonstrates that uniform, linear prices in power exchanges cannot ensure economic equilibrium or surplus maximization when non-convex block bids (e.g., ‘fill or kill’ bids) are present; proposes multi-part discriminatory... Read more
2. What are the potentials and challenges of market power exercise and mitigation strategies by new market participants such as aggregators and incumbent generators in deregulated electricity markets?
This theme explores how market participants—including aggregators integrating renewable generation, and incumbent generators—can strategically exercise market power in deregulated electricity markets. It focuses on mechanisms of manipulation like strategic generation curtailment and oligopolistic behavior, and on empirical and theoretical methodologies to quantify, monitor, and mitigate such market power. Understanding these aspects is critical for ensuring competitive, efficient market outcomes and informing regulatory policy.
Key finding: Shows that aggregators can strategically curtail renewable generation in radial networks to substantially increase profits (up to 25% or more) and affect locational marginal prices by several tens of $/MWh; provides an... Read more
Key finding: Develops a novel econometric model that infers ex-ante supply and demand behavior from bid-level data and quantifies market power on both supply (oligopoly) and demand (oligopsony) sides in Italy’s day-ahead market;... Read more
Key finding: Analyzes the multi-level, normative and interpretive complexity in defining, measuring, and mitigating market power in electricity markets; argues that regulatory choices reflect underlying policy commitments and competing... Read more
3. How do novel modeling approaches and market design adaptations improve the representation and management of price formation, volatility, and flexibility integration in deregulated power markets?
This research area focuses on advancing electricity market modeling techniques to realistically capture price volatility, non-convexities, and the integration of distributed and demand-side resources (DSR). It includes the development of computational models (e.g., agent-based models, portfolio-theory inspired frameworks) and enhanced market designs (e.g., voltage control markets, improved tariff strategies) tailored to handle complexities such as renewable intermittency, flexible demand, network constraints, and new market actors (e.g., prosumers, aggregators). These advancements are essential for guiding efficient market operation and supporting the green energy transition under deregulated conditions.
Key finding: Introduces EuroMod, a bottom-up deterministic linear optimization model that incorporates quadratic cost functions and post-processing to better replicate historical hourly price volatility and spread in European power... Read more
Key finding: Provides a comprehensive review of agent-based modeling (ABM) applications in electricity markets, emphasizing ABMs’ advantages in capturing complex, dynamic, and uncertain interactions among heterogeneous market... Read more
Key finding: Proposes a novel multi-portfolio analytical framework based on modern portfolio theory to quantify risk-return profiles of different demand-side resource (DSR) flexibility strategies in deregulated markets; illustrates how... Read more