Simulation model explores alternative wholesale power market structures

Abstract

The power crisis in California from the summer of 2000 to the spring of 2001 caused great interest and concern in the power industry about deregulation and liberalization of the wholesale power market. In response to this interest, EPRI has developed a prototype computer simulation model to study alternative wholesale power market structures. The results were presented at a workshop organized jointly by the California Energy Commission and EPRI on 7 November 2001 in Sacramento, California. This article is based on that presentation and represents work in progress. There are four objectives of developing and applying the EPRI Long Term Power Market Simulation Model (LTPMS): improve the understanding of how a competitive power market works in the long term; study the potential price volatility and boom-bust cycles of the power market; study alternative market designs and the role of a power authority to complement the market; and compare the long-term impacts of various market structures on the end-users and society.