A game theoretic model of the Northwestern European electricity market—market power and the environment

Lise, Wietze; Linderhof, Vincent; Kuik, Onno; Kemfert, Claudia; Östling, Robert; Heinzow, Thomas

doi:10.1016/j.enpol.2005.03.003

Cited by 91 publications

(37 citation statements)

References 14 publications

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“…Borenstein and Bushnell (1999) perform a Cournot analysis for the Californian market, assuming three Cournot competitors and a competitive Fringe. Lise et al (2006) apply a similar model to the Northwestern European electricity market and quantify how market power exertion by large producers harms consumers in different scenarios. Lise et al (2008) find that scarce European cross-border transmission capacity and dry weather lead to additional market power exertion potentials.…”

Section: Literaturementioning

confidence: 99%

Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany

Schill

Kemfert

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may

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Section: Literaturementioning

confidence: 99%

Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany

Schill

Kemfert

2011

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“…The arguments in favour of liberalisation include the expectable price reduction for the consumers. For example, a recent simulation study conducted for some European countries, corroborates this view and concludes that the prices in perfect competition scenarios are lower than in high market power scenarios (Lise et al, 2006).…”

Section: Introductionmentioning

confidence: 50%

An overview of the Portuguese electricity market

2007

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The electricity market in Portugal was recently opened to all consumers. However, it remains highly concentrated in terms of control of production and supply and the long-term power purchase arrangements still coexist with free market. This paper discusses the electricity market restructuring process in Portugal, presenting its main marks over the past years and the present situation. The evolution of the electricity prices in Portugal is analysed, and a comparison with EU-15 is presented. Special attention is given to Spain due to the possibility of cross-border competition in the future arising from the formation of the Iberian electricity market.

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“…However, empirical results in the presence of market power are controversial. Wals and Rijkers [24], Sijm et al [23] as well as Bonacina and Gullì [25] find that electricity prices increase more in competitive scenarios than under market power, whereas Lise et al [16] and Newbery [26] state that the relationship is likely to be the other way around. These discrepancies result mainly from varying assumptions about and estimations of price elasticities.…”

Section: Introductionmentioning

confidence: 99%

“…Ellersdorfer [15] has applied a two-stage Cournot model to the German electricity market, finding that there is potential for the four dominant producers to exercise market power. Lise et al [16] show that there is potential for strategic behavior in Germany, but it is lower than in the near-monopolies of France and Belgium. Because suppliers in real electricity markets face uncertain demand, supply function equilibrium (SFE) models assume that producers bid functions of quantityprice-combinations, rather than a single quantity as assumed in Cournot games.…”

Section: Introductionmentioning

confidence: 99%

Electricity pricing and market power—evidence from Germany

Janssen

Wobben

2009

Int Trans Elec Energy Syst

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The aim of this paper is to develop a methodology for measuring the exercise of potential market power in liberalized electricity markets. We therefore investigate producer behavior in the context of electricity pricing with respect to fundamental time-dependent marginal cost (TMC), i.e. CO 2 -and fuel cost. In doing so, we do not -in contrast to most current approaches to market power investigation -rely on an estimate of the entire generation cost, which inevitably suffers from the lack of appropriate available data. Applying an analytical model of a day-ahead electricity market, we derive work-on rates, which provide information about the impact of TMC variations on electricity prices in the market constellations of perfect competition, quasi-monopoly and monopoly. Comparing these model-based work-on rates with actual work-on rates, estimated by an adjusted first-differences regression model of German power prices on the cost for hard coal, natural gas and emission allowances, we find evidence of the exercise of market power in the period 2006 to 2008. However, our results reveal that German market competitiveness increases marginally. We confirm our results by simulating a TMC-driven diffusion model of futures power prices estimated by maximum-likelihood. AcknowledgementWe gratefully acknowledge the Deutsche Forschungsgemeinschaft (DFG = German Research Foundation) for financial support.

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A game theoretic model of the Northwestern European electricity market—market power and the environment

Cited by 91 publications

References 14 publications

Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany

Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany

An overview of the Portuguese electricity market

Electricity pricing and market power—evidence from Germany

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