The decreasing cost of energy storage technologies coupled with their potential to bring significant benefits to electric power networks have kindled research efforts to design both market and regulatory frameworks to facilitate the efficient construction and operation of such technologies. In this paper, we examine an open access approach to the integration of storage, which enables the complete decoupling of a storage facility’s ownership structure from its operation. In particular, we analyze a nodal spot pricing system built on a model of economic dispatch in which storage is centrally dispatched by the independent system operator (ISO) to maximize social welfare. Concomitant with such an approach is the ISO’s collection of a merchandising surplus reflecting congestion in storage. We introduce a class of tradable electricity derivatives—referred to as financial storage rights (FSRs)—to enable the redistribution of such rents in the form of financial property rights to storage capacity; and establish a generalized simultaneous feasibility test to ensure the ISO’s revenue adequacy when allocating such financial property rights to market participants. Several advantages of such an approach to open access storage are discussed. In particular, we illustrate with a stylized example the role of FSRs in synthesizing fully hedged, fixed-price bilateral contracts for energy, when the seller and buyer exhibit differing intertemporal supply and demand characteristics, respectively.
Journal of Regulatory Economics – Springer Journals
Published: May 9, 2017
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera