Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market
AbstractThe residential UK electricity market was opened for the first time in 1999, introducing choice of supplier, and about 40 percent of households changed supplier in the first four years. After three years price caps were removed. We review this process and assess the competitiveness of the market by examining how the charges levied by suppliers depend on cost and demand factors for three different payment methods and consumption levels. We also identify signs of additional market power of incumbency and the effect of levying a tariff with no fixed charge. We find that both cost and demand factors affect charges, and the relationship varies for different payment methods and consumption levels; and that tariffs with no fixed element have different effects for different payment methods. We also conclude that considerable market power seems to remain with potentially adverse distributional effects.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 25 (2004)
Issue (Month): Number 3 ()
Other versions of this item:
- Evens Salies & Catherine Waddams Price, 2004. "Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market," Sciences Po publications info:hdl:2441/7189, Sciences Po.
- Evens SALIES & Catherine WADDAMS PRICE, 2005. "Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market," Industrial Organization 0508010, EconWPA.
- F0 - International Economics - - General
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