Incentive properties of coincident peak pricing

FSR Energy Seminar Series with Professor R. Baldick (University of Texas at Austin)

Coincident peak pricing is used in several electricity markets to recover the embedded cost of infrastructure, such as transmission. Measured consumption at the time of the peak is used to set charges for a subsequent period. If transmission costs are truly sunk, then such a recovery is unlikely to be efficient. However, in the context of growing peak demand, additional system capacity must be built. We discuss the incentive properties of coincident peak pricing when investments are not considered to be sunk.

Presenter: Prof. Ross Baldick (University of Texas at Austin)

The Seminar is organised by the Research Team of the Florence School of Regulation – Energy and open to all EUI members.