Different equilibrium concepts have been proposed by various authors (Schweppe et al., Hogan et al., Chao and Peck, Wu et al.) to analyse competitive electricity systems. We establish correspondences between these different models through a single framework and provide additional interpretations of these equilibrium concepts. This unifying conceptual view also provides a computationally feasible approach to simulate the market. It also opens the way to the modeling of some imperfect markets.
This paper analyses the future organization of cross border trade in the European
electricity market. The draft Regulation “on Conditions for Access to the
Network for Cross-Border Exchanges in Electricity” issued in March 2001 by the
European Commission together with related documents produced by the European
association of Transmission System Operators (ETSO) and the Council of European
Electricity Regulators (CEER) until that date constitute the backbone of this
analysis. The paper examines whether the economic principles contained in these
documents suffice to design a working European electricity market and if not,
what is missing. It concludes that these principles need to be completed by
harder measures in order to induce the “real integrated single market” of
electricity claimed by the Commission. In short, the principles may be
necessary, but they are unlikely to be sufficient.
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