Stoft argues that a successful electricity market must achieve two primary objectives:
Introduction to deregulation, basic microeconomics, monopoly structures, and the unique traits of electricity. Reliability, Price Spikes, and Capacity Markets power system economics steven stoft pdf
Unlike many economists who view market power as a glitch, Stoft treats it as a feature of the electricity landscape. Because transmission constraints can isolate a geographic area (creating a "load pocket"), a single generator in that pocket can effectively become a monopolist during peak hours. Stoft argues that a successful electricity market must
Stoft proposes that market design must explicitly solve this through or Scarcity Pricing mechanisms . He forces the reader to accept a hard truth: reliable power requires paying for capacity that sits idle 99% of the time, and the market must be engineered to facilitate that payment, or reliability will erode. Stoft proposes that market design must explicitly solve