3. A region has the peak-period electricity demand in MWh given by D(r) = { 40,008...

 

 

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3. A region has the peak-period electricity demand in MWh given by D(r) = { 40,008 rif r 64 104,000 1,000r if r64 6 Exercises for Markets Module by Metin akanyldrm where r is the wholesale price in $/MWh. The generation capacity available during the peak period is 70,000 MWh, each unit of which has the marginal (variable) cost of $30/MWh. a) Which price yields the demand of 40,000 MWh? Which price yields the demand of 39,908 MWh? b) What is the peak-period market settlement price and demand? c) Is the capacity scarce? If yes, what is the scarcity value of capacity? 3. A region has the peak-period electricity demand in MWh given by D(r) = { 40,008 rif r 64 104,000 1,000r if r64 6 Exercises for Markets Module by Metin akanyldrm where r is the wholesale price in $/MWh. The generation capacity available during the peak period is 70,000 MWh, each unit of which has the marginal (variable) cost of $30/MWh. a) Which price yields the demand of 40,000 MWh? Which price yields the demand of 39,908 MWh? b) What is the peak-period market settlement price and demand? c) Is the capacity scarce? If yes, what is the scarcity value of capacity?