electricity dispatch decisions but struggle to reproduce realistic variation in prices. We show that current assumptions of …Electricity system models are widely used to study future designs of power markets. They are commonly used to represent … generators bidding their average variable cost (AVC) underestimates the spread and volatility of hourly wholesale prices, and so …

of prices over time. If generators bid their marginal costs, we find that the changes to the capacity mix are much … greater than the changes to the pattern of prices. Thermal capacity falls only slightly in response to the extra wind capacity … of prices, once capacity has adjusted, are relatively small. In an oligopolistic setting, strategic generators will …