Complete course materials for Energy Economics in the Energy Engineering degree programme at Politecnico di Milano. The document covers: The index of poverty also takes in Electricity is strictly limited Jed to the technological properties note is someone has access to to electricity Electrify consumption is linked to the increasing GDP of a country, its best even e higher in developing conutries Moreover the
Complete course materials for Energy Economics in the Energy Engineering degree programme at Politecnico di Milano. The document covers: The index of poverty also takes in Electricity is strictly limited Jed to the technological properties note is someone has access to to electricity Electrify consumption is linked to the increasing GDP of a country, its best even e higher in developing conutries Moreover the
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The index of poverty also takes in Electricity is strictly limited Jed to the technological properties note is someone has access to to electricity Electrify consumption is linked to the increasing GDP of a country, its best even e higher in developing conutries Moreover the demand is very volatile, enelctricity consumption isn’t uniquely between different countries and time of the day —> in energy market the volatily is far more difficult to overcome than for other industries To store electricity there aren’t yet economically convinient ways to Monotonic and descending curve How much time that demand exceeds or is equal to a given load Each point represents the ….. slide Is plotted by following the following steps: 1) looking at the highest consumption look at how many hours its has been exceeded 2) Remove the previous maximum load 3) look at the new maximum load and lookfor how many hours it has been exceeded
In the pure competitive market, since there’s no cost in entering or exiting the market, two cases can happen that ion the long run will lead to an equilibrium with no revenue for the firms. If firms are earning positive economic profits, price exceeds average total cost (ATC), These profits act as a signal: they attract new producers, because entering the market becomes financially appealing.As new firms enter, total market supply increases. With demand unchanged, the market-clearing price begins to fall. As price falls, the profits of all firms shrink. Entry continues until the opportunity to earn extra profits disappears. The same way as if the profit is negative, the firm will start exiting the market until the market reaches the equilibrium again. And with no extra porfit/loss nobody will want to enter/exit the market. But if new firms entry the market I’ll find another equilibrium price, lower than the one before. If the profit stays grater than zero more firms will enter, decreasing even more the price Any profit made by any firm is only temporary, in the long term, they don’t make any profit Hp that p* is the price for maximizing the profit. So if I’m below the AVC (average cost curve AC) I’ll have a negative cost. If I’m above the profit is positive So if price is > than the average cost the profit is positive!
Is there any different regulation that allows me to set the price P = MC, and still keeps the monopolist in the market? In order to do so, I have to change the way I decide prices The revenue of the monopoly is give by two parts, instead of one as before. The costumer is now asked to pay two different components For example Amazon Prime Video, amusement park and their fast tracks…. This is very convent for the firm, the profit will be significant with this strategy For gyms, I have to pay the access fee, if I go or not This way it’s allows the firm to set P = MC and have the efficient price, and cover the fixed costs with the constant A access fee If it’s regulated, user ideal conditions it might allows us to get to the optimal price. for example for the energy industry —> the maximum possible access fee equals the consumers surplus, and this determines if the consumer stays in the market or not
MRTS, that I got, will be the one applied by the monopolist. That Bc of the incentive, given to monopolist in incentives, they will choose a combination of K L that isn’t cost efficenct RoR effects • the monopolist produces the good quantity q, but it does it by inefficiently, they spend more than what was the ideal • If as a regulator I try to solve the situation by making s closer to r, this worsens the situation This is because the monopolist will push even further, the capital invested, will more in order to make that little different profitable • I can update s every single year, in order to reduce the investment monopolist do, but this won’t make the monopolist invest because there’s too much uncertainty. But this is also contro productive
About inflation For MACSE arerà defines a cap premium, during the delivery period that is adjusted with inflation on a monthly basis FER X since for previous auction the participation was scarse, now the awarded tariffs are adjusted to inflation. This increases the competition
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