UTES: Renewables and Electricity Market Design

Event Status

The UT Energy Symposium welcomes ­­­­­Peter Cramton, Professor of Economics at University of Cologne and University of Maryland to give a talk titled "Renewables and Electricity Market Design."

Speaker bio: Peter Cramton is Professor of Economics at the University of Cologne and the University of Maryland. Since 1983, he has conducted research on auction theory and practice. The main focus is the design of auctions for many related items. Applications include auctions for radio spectrum, electricity, and financial securities. He has introduced innovative market designs in many industries. He has advised numerous governments on market design and dozens of bidders in major auction markets. He received his B.S. in Engineering from Cornell University and his Ph.D. in Business from Stanford University.

Abstract: Electricity markets are designed to provide reliable electricity at least cost to consumers. This paper describes how the best designs satisfy the twin goals of short-run efficiency—making the best use of existing resources—and long-run efficiency—promoting efficient investment in new resources. The core elements are a day-ahead market for optimal scheduling of resources and a real-time market for security-constrained economic dispatch. Resources directly offer to produce per their underlying economics and then the system operator centrally optimizes all resources to maximize social welfare. Locational marginal prices, reflecting the marginal value of energy at each time and location, are used in settlement. This spot market provides the basis for forward contracting, which enables participants to manage risk and improves bidding incentives in the spot market. There are important differences in electricity markets around the world, reflecting different economic and political settings. Electricity markets are undergoing a transformation as the resource mix transitions from fossil fuels to renewables. The main renewables, wind and solar, are intermittent, have zero-marginal cost, and lack inertia. These challenges can be met with battery storage and improved demand response. However, good governance is needed to assure the market rules adapt to meet new challenges. 

The UT Energy Symposium meets every Thursday during the long semesters. Come early to attend a networking session before the talk: refreshments will be served at 4:45 p.m. in the POB Connector Lobby outside the auditorium.

Date and Time
Oct. 11, 2018, 5:15 to 6:15 p.m.
Avaya Auditorium, POB 2.302 | 201 E 24th St, Austin TX, 78712
Event tags
UT Energy Symposium