There seem to be several advantages in using System Dynamics modeling to understand the behavior of newly privatized industries. System dynamics models can develop insights on the possible evolution of the industry from public to private ownership and from protected to competitive markets. The implications for business strategy and for the regulatory framework can be examined under various scenarios. As part of the privatization of the UK electricity industry a spot market to clear the electricity market has been created. The main reason for the spot market is to set the half hourly price at which electricity is traded. A further aspect is that it allows the regulator to set incentives to increase or decrease the generating capacity according to what he believes is necessary in the long run. We have modeled capacity investment in this newly created industry in the basis of testing its theoretical design Our model focuses on how long term development of capacity utilization is likely to evolve, how much influence the regulator will have under the current regulatory framework, and how this framework should be modified to give the regulator more influence on the market to prevent cycles of over and under capacity.

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Date created

• 1994

Type

• Document

Processing Activity

• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

License

• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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ITEM CONTEXT

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fe35db792b573af835d96e6eba4759cd

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Part of

c060552994c1527f70693734935660f1

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Collection

System Dynamic Society Records

Scope and Contents

Collecting area

• This collection is part of the University Archives