TY - BOOK ID - 134658954 TI - Contracting for the Second Best in Dysfunctional Electricity Markets AU - Nikandrova, Arina AU - Steinbuks, Jevgenijs PY - 2014 PB - Washington, D.C., The World Bank, DB - UniCat KW - Electricity Trade KW - Energy KW - Energy Production and Transportation KW - Energy Technology and Transmission KW - Infrastructure Economics KW - Infrastructure Economics and Finance KW - Macroeconomics and Economic Growth KW - Political Economy KW - Power & Energy Conversion KW - Risk Sharing Arrangements KW - Self-Enforcing Contracts UR - https://www.unicat.be/uniCat?func=search&query=sysid:134658954 AB - Power pools constitute a set of sometimes complex institutional arrangements for efficiency-enhancing coordination among power systems. Where such institutional arrangements do not exist, there still can be scope for voluntary electricity-sharing agreements among power systems. This paper uses a particular type of efficient risk-sharing model with limited commitment to demonstrate that second-best coordination improvements can be achieved with low to moderate risks of participants leaving the agreement. In the absence of an impartial market operator who can observe fluctuations in connected power systems, establishing quasi-markets for trading excess electricity through the kind of mechanism described here helps achieve sustainable cooperation in mutually beneficial electricity sharing. ER -