Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201403
Authors: 
Schill, Wolf-Peter
Kemfert, Claudia
Year of Publication: 
2010
Series/Report no.: 
DIW Discussion Papers 947
Abstract: 
We develop a game-theoretic electricity market model that allows analyzing strategic electricity storage in an imperfect market setting. We apply the model to Germany and examine different cases of strategic and non-strategic pumped hydro storage operation. We find that introducing storage generally smoothes conventional generation patterns and market prices and increases consumer rent and overall welfare. In contrast, electricity producers generally suffer from storage. We also find that the utilization of storage capacities depends on their operator's ability to exert market power both regarding storage and conventional generation. In particular, strategic operators tend to under-utilize their storage capacities, which in turn has welfare implications. The distribution of storage among players also matters. Accordingly, economic regulation of existing and future storage capacities may be necessary.
Subjects: 
Electric Power Markets
Storage
Market Power
Nash-Cournot
JEL: 
Q40
Q41
L13
D43
Document Type: 
Working Paper

Files in This Item:
File
Size
535.08 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.