arbiter
JournalsAccount

Strategic interaction between wholesale and ancillary service markets

David P. Brown et al.

Competition and Regulation in Network Industries2023https://doi.org/10.1177/17835917231217125article
ABDC B
Weight
0.44

Abstract

In electricity markets, ancillary services (AS) are vital to ensuring system reliability through the instantaneous balancing of supply and demand. An important current policy question is whether AS markets clear simultaneously or sequentially with wholesale markets. We develop a model to study the strategic implications of market timing. We demonstrate that a strategic incentive to reduce AS and, consequently, lower marginal cost in the wholesale market arises when markets clear sequentially. Using data from Alberta, we find that the strategic effect has a small impact on wholesale outcomes but a large impact on the AS market.

6 citations

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1177/17835917231217125

Or copy a formatted citation

@article{david2023,
  title        = {{Strategic interaction between wholesale and ancillary service markets}},
  author       = {David P. Brown et al.},
  journal      = {Competition and Regulation in Network Industries},
  year         = {2023},
  doi          = {https://doi.org/https://doi.org/10.1177/17835917231217125},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Strategic interaction between wholesale and ancillary service markets

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.44

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.24 × 0.4 = 0.10
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.