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Analyzing California's Power Crisis

Ahmad Faruqui, Hung-po Chao, Vic Niemeyer, Jeremy Platt and Karl Stahlkopf

Year: 2001
Volume: Volume22
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol22-No4-2
No Abstract



Netting of Capacity in Interconnector Auctions

Felix Hoffler and Tobias Wittmann

Year: 2007
Volume: Volume 28
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No1-6
View Abstract

Abstract:
Scarce interconnector capacities are a severe obstacle to transregional competition and a unified market for electricity in the European Union. However, physically the interconnectors are rarely used up to capacity. This is due to the fact that the current allocation schemes make only limited use of the fact that currents in opposing directions cancel out. We propose a �netting� auction mechanism which makes use of this and in which even small transmission capacities can generate large competitive pressure in adjacent markets. Netting increases the usage of capacity and reduces the auctioneer�s incentive to withhold capacity from the auction.



How Competitive is Cross-border Trade of Electricity? Theory and Evidence from European Electricity Markets

Georg Gebhardt and Felix Hoffler

Year: 2013
Volume: Volume 34
Number: Number 1
DOI: 10.5547/01956574.34.1.6
View Abstract

Abstract:
Integrating national markets is a major policy target in the European energy market. Yet, wholesale prices for electricity still differ significantly. Whether these price differences are caused only by limited interconnector capacities or also by lack of cross-border competition is an open question. To address this question, we develop a new approach to determine to which extent price differences stem from limited participation in cross-border trade. We derive a theoretical integration benchmark, using Grossman's (1976) notion of a rational expectations equilibrium. We compare the benchmark to data from European electricity markets. The data reject the integration hypothesis and indicate that well informed traders do not engage in cross-border trade.



The Role of Attitudes and Marketing in Consumer Behaviours in the British Retail Electricity Market

Miguel Flores and Catherine Waddams Price

Year: 2018
Volume: Volume 39
Number: Number 4
DOI: 10.5547/01956574.39.4.mflo
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Abstract:
We examine characteristics associated with consumer (dis)engagement in the residential electricity market, a topic of increasing policy interest and intervention, introducing consumer attitudes and marketing recall as new factors. General attitudes are closely associated with electricity market activity, with considerable variation in the strength and statistical significance of these relationships, indicating very different motivations amongst consumers. Recall of direct marketing routes has little identifiable effect, while advice of family and friends is influential. We identify implications for communication by both suppliers and policy makers seeking to improve the functioning of such markets, including the necessity for a variety of approaches.



The Impact of Competition Policy Enforcement on the Functioning of EU Energy Markets

Tomaso Duso, Jo Seldeslachts, and Florian Szucs

Year: 2019
Volume: Volume 40
Number: Number 5
DOI: 10.5547/01956574.40.5.tdus
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Abstract:
We investigate the impact of competition policy enforcement on the functioning of European energy markets while accounting for sectoral regulation. For this purpose, we compile a novel dataset on the European Commission's (EC) and EU member states' competition policy decisions in energy markets and combine it with firm- and sector-level data. We find that EC merger policy has a positive and robust impact on (i) the level of competition, (ii) investment and (iii) productivity. This impact, however, only shows up in low-regulated sectors. Other competition policy tools - EC state aid control and anti-trust, as well as all member state policy variables - do not have a uniform effect on energy markets. Our findings are consistent with the idea that the EC's merger policy actions have been used to overcome obstacles to a well-functioning EU energy sector and may have contributed to the overall development of gas and electricity markets in Europe.



Reciprocal Dumping under Dichotomous Regulation

Sébastien Debia and Georges Zaccour

Year: 2022
Volume: Volume 43
Number: Number 5
DOI: 10.5547/01956574.43.5.sdeb
View Abstract

Abstract:
An essential ingredient to net-zero-emissions policies is to regionally integrate electricity markets. But electricity cross-border trades are often assessed as inefficient. We explain this inefficiency by the presence of a dichotomous regulation: producers are highly regulated with regard to their local activities, but weakly regulated when it comes to their exports. Such a dichotomy in regulation can be generalized to every economic sector, with varying intensity. We develop a generic 2-player 2-stage game theoretical framework where producers anticipate the impact of their exports on the clearing of regulated local markets. We characterize the subgame-perfect Nash equilibrium of the game as a function of the relative price-elasticity between markets. Overall, dichotomous regulation leads producers to over-export in order to create scarcity in their home market. Hence, despite that local markets clear efficiently, the global equilibrium is inefficient. When the two jurisdictions are relatively symmetric, the equilibrium is Pareto-dominated by the first-best outcome. These results call for better coordination between regulators across different jurisdictions.





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