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EMF 17: Prices and Emissions in a Restructured Electricity Market



This report summarizes the working group’s discussions of the modeling results on U.S. electricity markets. Although international electricity markets were featured prominently in the presentations and discussions, the comparison of model results discussed in this report focuses on the United States.

The EMF 17 working group is an international forum of leading experts and advisors working to understand, through modeling and analysis of different country experiences, how prices will be determined within a competitive electricity industry and how these developments will affect regional electricity generation and power flows, fuel markets, and the environment. The group focuses on understanding the longer-term price and environmental risks rather than on trying to predict short-run electricity prices.

A major objective is to bring together in a non-partisan environment leading experts with those individuals charged with implementing the changes either in the public or private sector. The study also allows opportunities to coordinate activities being conducted at different institutions.

The group focuses on discussing three broad topics:

understanding the longer-term price and environmental risks under alternative market conditions;

learning how the number of firms and the extent of coverage by contracts influences the ability of larger firms to set higher prices (through exercising their market power); and

comparing alternative market designs for organizing generation in different countries and regions of the United States.

Here the discussion is evaluating how appropriate are existing as well as newer analytical tools for addressing the fundamental decisions in competitive markets. How sophisticated and complicated does an analytical approach need to be to produce useful insights?

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