Problemas del Desarrollo. Revista Latinoamericana de Economía. ene-mar2019, Vol. 50 Issue 196, p167-189. 23p.
Electricity pricing, ECONOMIC policy, Input-output analysis, Electric power, Mexico -- Economic conditions, Mexico, and Power transmission
This paper presents a multisectoral analysis of the increase in electricity prices in the Mexican economy, applying a pricing model and using the most recent input-output matrix. Increases in the manufacture of petroleum derivatives and coal, as electricity sources, are also analyzed. Additionally, increases in the generation, transmission and distribution of electricity are studied. The key findings obtained from this analysis show that a 40% increase has the most significant impact on sectors such as air transport (7.76%); land passenger transportation (6.04%) -except rail-, tourist transport (6.04%) and on the generation, transmission and distribution of electricity (5.58%). This increase in turn impacts all subsectors of the national economy. [ABSTRACT FROM AUTHOR]
Energy policy, Scarcity, Power resources, Prices, Simulation methods & models, Electricity, Electric power consumption, and Interconnected electric utility systems
Energy policy makers usually ignore the response of the demand for electricity to changing prices because they believe that the price elasticity is nil. We show that a "small" price elasticity of demand generates "large" changes in energy shortage probabilities and generation costs when the system operates near capacity for extended periods. The reason is that in the neighborhood of the system's capacity, the short run electricity supply curve is nearly vertical. We make our point by simulating the expected operation of Chile's Central Interconnected System between 2006 and 2010, after the onset of the Argentine gas supply cuts. We show that price increases wrought by the postponement of investments in new plant and gas supply cuts, combined with a "small" monthly price elasticity of demand (0.0548 in absolute value), were enough to drastically reduce the probability of an energy shortage and return it to normal levels. Furthermore, if one ignores the response of demand to price, expected marginal costs are overestimated by 32% and expected total operation costs by 41%. [ABSTRACT FROM AUTHOR]
Cuadernos de Economía. may2007, Vol. 44 Issue 129, p3-30. 28p.
Auctions, Risk, Prices, Scarcity, Letting of contracts, Electricity, and Equilibrium
This paper studies the non-cooperative equilibrium of an electricity auction in which bidding firms are risk averse and have complete information. It assumes a centralized dispatch and stochastic hydraulic generation. We find that the auction allocates the energy contract to the generating firm that sets the spot market price: the thermal firm under moderate hydrological conditions and the hydraulic firm under a severe drought (rationing). In both cases the equilibrium price is greater than the regulated nodal price. Results are robust to introducing compensations for supply shortages. Finally, we find that if firms were risk-neutral they would bid the same prices and equal to the regulated nodal price, regardless of supply-shortage risk. [ABSTRACT FROM AUTHOR]