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Title:
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The European electricity market. What are the effects of market power on prices and the environment?
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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1-7-2005
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ECN report number:
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Document type:
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ECN-RX--05-190
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Conference Paper
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Number of pages:
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Full text:
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11
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Download PDF
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Presented at: EcoMod2005 International Conference on Policy Modeling, Istanbul, Turkey, 29 juni 2005-2 juli 2005.
Abstract:
This paper presents a static computational game theoretic COMPETES model.This model is used to study the economic and environmental effects of
the liberalisation of the European electricity market. The COMPETES
model takes strategic interaction into account. The model is calibrated
to four European countries: Belgium, France, Germany and the Netherlands.
To analyse the impact of emission trading, a fixed permit price per
tonne CO2 emissions is introduced. The effects are studied under different
market structures depending on the ability of firms to exercise market
power. The results indicate that the effects of liberalisation depend
on the resulting market structure, while a reduction in market power
of large producers may be beneficial for the consumer (i.e. lower prices),
this is not necessarily true for the environment (i.e. lower reduction
in CO2 emissions).
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