This paper shows with a formal model that under monopoly regulation, OPEX-risk can be a source for a CAPEX-bias. If OPEX and CAPEX are substitutes, the regulated firm can reduce the risk of the firm and thereby reduce the true cost of capital by rebalancing OPEX and CAPEX. If the allowed...

How should we select winning bids of generation units for strategic reserves that consist of capacity bids and energy bids? In this paper, we analyze two selecting mechanisms (scoring rules): "simultaneous" and "sequential". In case of a simultaneous scoring rule, capacity and energy bids are...

How should we select winning bids of generation units for strategic reserves that consist of capacity bids and energy bids? In this paper, we analyze two selecting mechanisms (scoring rules): "simultaneous" and "sequential". In case of a simultaneous scoring rule, capacity and energy bids are...

This paper shows with a formal model that under monopoly regulation, OPEX-risk can be a source for a CAPEX-bias. If OPEX and CAPEX are substitutes, the regulated firm can reduce the risk of the firm and thereby reduce the true cost of capital by rebalancing OPEX and CAPEX. If the allowed...