Chapter

Lessons Learned: The Texas Experience

Ross Baldick and Hui Niu

in Electricity Deregulation

Published by University of Chicago Press

Published in print August 2005 | ISBN: 9780226308562
Published online February 2013 | e-ISBN: 9780226308586 | DOI: http://dx.doi.org/10.7208/chicago/9780226308586.003.0005
Lessons Learned: The Texas Experience

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This chapter discusses lessons that can be learned from the experience of the Electric Reliability Council of Texas (ERCOT). It explains that ERCOT is a bilateral market and rather than serving as market maker it takes the more passive role of collecting schedules of bilateral trades and only running a small residual market for balancing supply and demand in real-time. This chapter suggests that the success of ERCOT shows that an electricity market can be run without a centrally dispatched day-ahead market. It also explains that while portfolio scheduling can provide considerable flexibility to market participants it can also result to reduced market efficiency, lack of price discovery and operational problems.

Keywords: ERCOT; electricity industry; Texas; bilateral market; electricity market; portfolio scheduling; market efficiency; operational problems

Chapter.  14796 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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