Participants in and components of the smart market institution

Abstract

This chapter describes the roles of market participants, starting with the market manager. The chapter assumes that the prerequisites, or extra-market considerations, for market implementation are already in place. It discusses the participants’ bids and the bidding process, the market manager’s transaction and allocation database, and the market-clearing model. A section describes the steps in routine operations, and gives additional rules for operations. Later sections describe how hydrological recharge affects the market design, and give an example from Australia of salinity discharge. The final sections discuss the problems that would arise if the private sector were to operate the market, various market structures, and likely questions that implementers would face.