Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307448 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
IFN Working Paper No. 1512
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
The power exchange and the real-time markets used by the system operator differ in how system constraints are managed. This can result in regulatory arbitrage, which can increase consumer costs, increase the risk of power outages and distort investment incentives. This paper uses a game-theoretical approach to study these problems and proposes various measures to reduce them. For example, zones and grid tariffs can be adjusted. Moreover, regulations of real-time markets can improve, and transmission system operators can implement measures to increase the capacity of the existing grid.
Subjects: 
Congestion management
zonal pricing
countertrading
redispatch
real-time market
regulatory arbitrage
inc-dec game
JEL: 
C72
D47
L94
Document Type: 
Working Paper

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