Production cost minimization versus consumer payment minimizationin electricity pools

摘要

Algorithms that involve some kind of optimization have beennadopted by several electricity pools as a tool to clear the market.nTraditionally, this kind of models were used on a cost minimizing basis,nbut recent papers have pointed out that alternative dispatches may benobtained that, even with higher production costs, result in lowernelectricity prices for consumers. This paper studies this newnpayment-minimization approach, including the long-term economic signalsnthat it provides and their impact on future investments. The authorsnresults show that minimizing consumer payment results in discriminatorynscheduling for certain generation resources and may cause, in thenlong-run, higher prices for consumers