Subject: abstract
shmuel ,
this is the abstract for my presentation on the 23 rd of october .
i am in london and paris this week . i can be reached at my
private e - mail address vkaminski @ aol . com .
please , feel free to suggest modifications to the abstract .
vince
> the last three years were characterized by exceptionally high volatility of
> the power prices in the us markets . the market developments have created a
> number of unique challenges for energy industry economists . one immediate
> question we have to answer is how to measure volatility of energy prices .
> although we can all agree that the prices in the power markets are
> characterized by high variability , the traditional measures used in
financial
> economics ( annualized standard deviation of log price returns ) may not fit
> well electricity prices . the second challenge is to explain the sources of
> high price volatility and to answer the question to what extent it can be
> attributed to problems that can be addressed in the long run . such problems
> include flaws in market design that allow some market participants to abuse
> market power , limited availability and / or unequal access to transmission ,
> temporary shortages of generation capacity . some factors underlying high
> volatility of electricity prices may be of permanent nature and may be a
> necessary price to pay for increased market efficiency and expanded customer
> choice .