PhD THESIS
The price from wholesale electricity market as expression of the active demand-side participation: application of experimental economics
Abstract
Studies of competitive equilibrium price deviations have shown that current electricity markets still have flaws and imperfections due to different causes. Theoretically, they can be controlled and mitigated through active participation of the demand side in the market. The main objective of this thesis is to demonstrate experimentally that an active demand-side increases the control of wholesale electricity markets and helps mitigate their imperfections, while opening new opportunities for technological and economic management. This thesis introduces a new application of experimental economics methodology for evaluating real electricity markets, which proposes the development of knowledge models to carry out an empirical study of the electricity market and the detection of their flaws and imperfections. Subsequently, these models become the prototype experimental test of the market used to predict the experimental market behavior under different alternatives to introduce active demand-side participation. This methodology was applied to the study of active demand participation in the Spanish Energy Production Market. The introduction of independent demand aggregators, which provide flexible interruptible loads in real time, was found to mitigate the market power of vertically integrated holding companies (generators-distributors) with high market share. Furthermore, the experimental prototype was validated through the experimental reproduction of scarcity-abundance conditions of the real electricity market studied.