Econonomics of Energy and Environmental Policy

Article Details

IAEE Members and subscribers to Economics of Energy & Environmental Policy : Please log in to access the full text article.

Energy Market Integration and Electricity Trade

Free Article

This paper explores energy trade in the electricity market by undertaking a comprehensive empirical analysis of the effect of Europe's progressive Energy Market Integration (EMI). Its aim is to quantify the effect of EMI on electricity trade in Europe in order to derive corresponding evidenced- based policy implications. The empirical strategy employs standard goods trade gravity models, adapted to energy trade in the electricity market and estimated using standard gravity techniques. We use energy trade flows between European countries to quantify the effect of the successive EMI enlargements on energy flows. The paper highlights relevant fact-based policy implications for integrating electricity markets. Our results suggest that EMI creates electricity trade among members, but also diverts trade between non-members. Two main mechanisms appear to account for the EMI effect: namely, market enlargement and the integration of electricity markets.
Download PDF
Keywords: Energy Market Integration; Electricity trade; gravity equation; electricity markets; European single market

DOI: 10.5547/2160-5890.8.2.jbat

Reference information is available for this article. Join IAEE or purchase the article to view reference data.

Published in Volume 8, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


© 2024 International Association for Energy Economics | Privacy Policy | Return Policy