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a) ABSTRACT 
In this research project we focus on the design of the optimal multi-unit auction mechanisms for the sale of electricity (i.e. pricing). In addressing the auction design, we take into consideration how market rules affect operators’ strategic choices on profitability of their plants/investments, and the cost for regulating the grid. We specifically address the optimal technical operation of a fleet of power plants and storage, in the frame of the evolving technical regulations and penetration of intermittent generation from RES***. 

b) OBIETTIVI
Exploiting the expertise of researchers in the Department of Economics and Management and in the Department of Industrial Engineering at the Univ. of Padova, the aim of this project is to investigate with an interdisciplinary approach the pricing of electricity which belongs to the design of the multiunit auction  mechanisms adopted for the sale of electricity. In this perspective, we take into consideration:
- how different rules referred to the sale of capacity and ancillary services can affect the operators’ strategic choices, the profitability of their plants and investments, and the cost for regulating the grid;
- how the optimal technical operation of a fleet of power plants - in the frame of the evolving technical regulations (see 302/2014/R/eel) and penetration of intermittent generation from RES - can affect storage, intra-daily market, trading, etc.

c) ATTIVITÀ PREVISTE
The electricity market is changing fast with the increasing penetration of renewable energy sources and the diffusion of distributed generation. Grid operators are facing a challenging task in regulating the grid: the self despatching of generators is becoming an option in many European markets to support grid control. In Italy, payments for unscheduled production are being introduced and the optimization of load profiles is becoming a kernel issue. 
Operating a fleet of generators requires to optimize the use of primary energy sources, coupling different technologies to determine a scheduled output that can: 
- optimally respond to electricity market demand (i.e. also considering the regulator’s objectives about renewables), and
- maximize profitability from electricity sale and investment in the sector.
The sale of electricity is usually realized through auctions. A well-designed auction should lead to significant competition between bids revealing the real costs of the individual projects, thus promoting new technologies and leading to cost-efficient supply. Economic literature highlights the complexity of auction  outcomes as related to the rules adopted (Krishna, 2009). In considering explicitly renewable electricity production, a well-designed auction mechanism should limit the support needed for RES production to the minimum (i.e. increase the market design efficiency). By allowing firms – through auctions - to obtain  revenue from holding capacity, regulator aims to:
i) keep electricity shortage prices at a politically acceptable level and
ii) secure long run investment in electricity generation (and thus in renewable production) at the same time.
Most of the auctions realized in the electricity sector are reverse multi-unit auctions where multiple items of a homogeneous product (i.e. electricity) are sold by multiple sellers to a sole buyer. Since one supplier is not able to supply the total amount of electricity and there are several winners of the auction, electricity auctions could be considered as multi-unit auctions. A broad variety of auction formats and price determination rules are currently adopted in the electricity market (Fabra et al 2006, 2011): the marginal cost of production of electricity is corresponding to the bidder's value in ordinary auctions. The bidder's expected profit in a reverse auction is the difference between the selling price and his cost, which is his private information. The two main objectives that a reverse

PUBBLICAZIONI:

'- Corazzini, L., Galavotti, S., Sausgruber, R., & Vabonesi, P. "Allotment in first-price auctions: An experimental investigation." Experimental Economics (2016, forthcoming). DOI:10.1007/s10683-016-9476-1
'- Mazzi, N., Lorenzoni, A., Rech, S., & Lazzaretto, A. "Electricity auctions: A European view on markets and practices." 2015 12th International Conference on the European Energy Market (EEM). IEEE, 2015. DOI: 10.1109/EEM.2015.7216765
'- Mazzi, N., & Pinson, P. "Purely data-driven approaches to trading of renewable energy generation." 2016 13th International Conference on the European Energy Market (EEM). IEEE, 2016. DOI: 10.1109/EEM.2016.7521323 Codice Scopus: 2-s2.0-84983268752 '-An Experimental Study on Sequential Auctions with Privately Known Capacities. (L. Corazzini S. Galavotti, P. Valbonesi), Games and Economic Behavior, 2019, 117:289?315, DOI: 10.1016/j.geb.2019.06.005.