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Market power in the European electricity market - The impacts of dry weather and additional transmission capacity
Lise, W.; Hobbs, B.F.; Hers, J.S.
Gepubliceerd door: Publicatie datum:
ECN Beleidsstudies 30-4-2008
ECN publicatienummer: Publicatie type:
ECN-W--08-033 Artikel wetenschap tijdschrift
Aantal pagina's:

Gepubliceerd in: Energy Policy (Elsevier), , 2008, Vol.36 , p.1331-1343.

This paper uses a static computational game theoretic model of a fully opened European electricity market and can take strategic interaction among electricity-producing firms into account. The model is run for a number of scenarios: first, in the baseline under perfect competition, the prices differ due to the presence of various generation technologies and a limited ability to exchange electricity among countries. In addition, when large firms exercise market power, the model runs indicate that prices are the highest in countries where the number of firms is low. Second, dry weather would increase the prices in the hydro-rich Nordic countries followed by the Alpine countries. The price response would be about 20% higher with market power. Third, more transmission capacity would lower the prices in countries with high prices and it also reduces the impact of market power. Hence, more transmission capacity can improve market competitiveness.

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