Hydroelectric Generators Competing in Cascades*

Detalhes bibliográficos
Autor(a) principal: Moita,Rodrigo
Data de Publicação: 2020
Outros Autores: Monte,Daniel
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Revista Brasileira de Economia (Online)
Texto Completo: http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402020000100049
Resumo: Abstract Hydroelectric generation is the main source of energy production in many countries. When firms operate in the same river, or in cascades, the output of an upstream firm is the input of its downstream rival. We build a dynamic stochastic duopoly model of competition in cascades and show that the decentralized market is inefficient when rain is frequent. However, at the critical times when rain is infrequente the market allocation is efficient. In an extension of our benchmark model, we show that regulatory intervention might be necessary if peak prices are sufficiently higher than off-peak prices. In such cases, upstream firms delay production in off-peak times, limiting their rival downstream generators’ production in peak times.
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spelling Hydroelectric Generators Competing in Cascades*Electricity marketsdynamic gameshydroelectric generationAbstract Hydroelectric generation is the main source of energy production in many countries. When firms operate in the same river, or in cascades, the output of an upstream firm is the input of its downstream rival. We build a dynamic stochastic duopoly model of competition in cascades and show that the decentralized market is inefficient when rain is frequent. However, at the critical times when rain is infrequente the market allocation is efficient. In an extension of our benchmark model, we show that regulatory intervention might be necessary if peak prices are sufficiently higher than off-peak prices. In such cases, upstream firms delay production in off-peak times, limiting their rival downstream generators’ production in peak times.Fundação Getúlio Vargas2020-01-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402020000100049Revista Brasileira de Economia v.74 n.1 2020reponame:Revista Brasileira de Economia (Online)instname:Fundação Getulio Vargas (FGV)instacron:FGV10.5935/0034-7140.20200003info:eu-repo/semantics/openAccessMoita,RodrigoMonte,Danieleng2020-04-30T00:00:00Zoai:scielo:S0034-71402020000100049Revistahttp://bibliotecadigital.fgv.br/ojs/index.php/rbe/issue/archivehttps://old.scielo.br/oai/scielo-oai.php||rbe@fgv.br1806-91340034-7140opendoar:2020-04-30T00:00Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)false
dc.title.none.fl_str_mv Hydroelectric Generators Competing in Cascades*
title Hydroelectric Generators Competing in Cascades*
spellingShingle Hydroelectric Generators Competing in Cascades*
Moita,Rodrigo
Electricity markets
dynamic games
hydroelectric generation
title_short Hydroelectric Generators Competing in Cascades*
title_full Hydroelectric Generators Competing in Cascades*
title_fullStr Hydroelectric Generators Competing in Cascades*
title_full_unstemmed Hydroelectric Generators Competing in Cascades*
title_sort Hydroelectric Generators Competing in Cascades*
author Moita,Rodrigo
author_facet Moita,Rodrigo
Monte,Daniel
author_role author
author2 Monte,Daniel
author2_role author
dc.contributor.author.fl_str_mv Moita,Rodrigo
Monte,Daniel
dc.subject.por.fl_str_mv Electricity markets
dynamic games
hydroelectric generation
topic Electricity markets
dynamic games
hydroelectric generation
description Abstract Hydroelectric generation is the main source of energy production in many countries. When firms operate in the same river, or in cascades, the output of an upstream firm is the input of its downstream rival. We build a dynamic stochastic duopoly model of competition in cascades and show that the decentralized market is inefficient when rain is frequent. However, at the critical times when rain is infrequente the market allocation is efficient. In an extension of our benchmark model, we show that regulatory intervention might be necessary if peak prices are sufficiently higher than off-peak prices. In such cases, upstream firms delay production in off-peak times, limiting their rival downstream generators’ production in peak times.
publishDate 2020
dc.date.none.fl_str_mv 2020-01-01
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402020000100049
url http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402020000100049
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 10.5935/0034-7140.20200003
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv text/html
dc.publisher.none.fl_str_mv Fundação Getúlio Vargas
publisher.none.fl_str_mv Fundação Getúlio Vargas
dc.source.none.fl_str_mv Revista Brasileira de Economia v.74 n.1 2020
reponame:Revista Brasileira de Economia (Online)
instname:Fundação Getulio Vargas (FGV)
instacron:FGV
instname_str Fundação Getulio Vargas (FGV)
instacron_str FGV
institution FGV
reponame_str Revista Brasileira de Economia (Online)
collection Revista Brasileira de Economia (Online)
repository.name.fl_str_mv Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)
repository.mail.fl_str_mv ||rbe@fgv.br
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