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Hartley, Peter R. Inal, Ozgur 2013-03-08T00:34:38Z 2013-03-08T00:34:38Z 2011 Inal, Ozgur. "Essays in Power System Economics." (2011) Diss., Rice University. <a href="https://hdl.handle.net/1911/70272">https://hdl.handle.net/1911/70272</a>. https://hdl.handle.net/1911/70272 InalO THESIS ECON. 2012 INAL In the first chapter, we propose a new method for modeling competition in electricity spot markets, namely, by approximating the supply functions of the competitors with cubic splines. We argue that this method is preferable to approximation by linear or piecewise-affine functions, which have been the main approaches to date. We apply our method to the firms competing in the Texas market. We also show that, more often than not, we will observe that the marginal revenue functions of the firms will have increasing segments which may lead to multiple profit-maximizing optima for a firm. In the second chapter, we model the effects of forward contracting on power prices in wholesale electricity markets. In contrast to most of the previous literature, we explicitly model power retailers, and introduce risk aversion. As expected, increasing the number of players have pro-competitive effects on the spot price of electricity. We also find that as the generators bid more competitively, spot and forward prices converge. Our model also captures the effects of level and variability of power demand on the players' contracting decisions. In the final chapter, we depart from equilibrium approach and utilizing agent-based modeling, analyze the effects of increased power demand price sensitivity on the level and volatility of power prices. We find that as the price sensitivity increases at the demand side, power price as well as its volatility decrease significantly. We also argue that the celebrated Herfindahl-Hirschman Index to measure market concentration is not a suitable metric for power markets. 121 p. application/pdf eng Copyright is held by the author, unless otherwise indicated. Permission to reuse, publish, or reproduce the work beyond the bounds of fair use or other exemptions to copyright law must be obtained from the copyright holder. Social sciences Applied sciences Power systems Electricity spot markets Supply function equilibrium Economics Electrical engineering Energy Essays in Power System Economics Thesis Text Economics Social Sciences Rice University Doctoral Doctor of Philosophy open.access