Policy recommendations concerning optimal scale of production units often have serious implications for the restructuring of a sector, while tests of natural monopoly have important implications for regulatory structure. The piecewise linear frontier production function framework is becoming the...

Policy recommendations concerning optimal scale of production units may have serious implications for the restructuring of a sector. The piecewise linear frontier production function framework (DEA) is becoming the most popular one for assessing not only technical efficiency of operations, but...

The present paper develops a basic framework for evaluating and optimizing profits in a business operation. In developing a business we are often faced with an infinity of choices ranging from what products or services to sell and what customers to target to how to structure and manage the...

Adopting a zonal structure of electricity market requires specification of zones’ borders. In this paper we use social welfare as the measure to assess quality of various zonal divisions. The social welfare is calculated by Market Coupling algorithm. The analyzed divisions are found by the...

We compare two competing methodologies of market zones identification under the criterion of social welfare maximization: (i) consensus clustering of Locational Marginal Prices over different wind scenarios and (ii) congestion contribution identification with congested lines identified across...

Adopting a zonal structure of electricity market requires specification of zones’ borders. One of the approaches to identify zones is based on clustering of Locational Marginal Prices (LMP). The purpose of the paper is twofold: (i) we extend the LMP methodology by taking into account variable...

One of the methodologies that carry out the division of the electrical grid into zones is based on the aggregation of nodes characterized by similar Power Transfer Distribution Factors (PTDFs). Here, we point out that satisfactory clustering algorithm should take into account two aspects. First,...

Zonal configuration of energy market is often a consequence of political borders. However there are a few methods developed to help with zonal delimitation in respect to some measures. This paper presents the approach aiming at reduction of the loop flow effect – an element of unscheduled...

By means of a constructive example we show that clustering of Locational Marginal Prices (LMPs) might give unsatisfactory results of zonal division of energy market. Specifically, we find that the division obtained from clustering of LMPs in some cases may not place the congested lines on the...

In economics scale properties of a production function is charcterised by the value of the scale elasticity. In the field of efficiency studies this is also a valid approach for the frontier production function. It has no good meaning to talk about scale properties of inefficient observations....