We develop a theoretical model of long-run investment decisions on capacity in the context of a liberalized electricity … the level of capacity that maximizes social welfare, and compare it to a decentralized outcome. We show that in the … absence of any regulation, private investment decisions on capacity unambiguously lead to a socially sub-optimal outcome, and …

Several regulatory authorities worldwide have recently imposed forward contract obligations on electricity producers as … bidding in electricity markets, or in any other auction-based market. For this purpose, we introduce forward contracts in a …

electric power system. The paper starts by deriving the (second-best) optimal prices and investment program when there are … contingent on real time prices. It then examines the assumptions required for a competitive wholesale and retail market to … assumptions. First, it analyzes the interrelationships between regulator-imposed price caps and capacity obligations. It goes on …

Motivated by the regulatory debate in electricity markets, we seek to understand how market design affects market … (iii) bid duration. We find that, although the discriminatory auction tends to lower prices, this does not imply that …

The EU faces challenges in reforming the Gas and Electricity Directives to implement the single market in electricity …. A key issue is striking the right balance between complete liberalisation and ensuring adequate capacity and investment …