Supply Function Competition in the Spanish Wholesale Electricity Market
AbstractWe represent the Spanish wholesale market as a supply function competition model. Theoretically, the larger generators’ supply curves for each plant should be to the left of the supply curves of plants owned by smaller generators. We test this prediction for fuel plants using data from the Spanish Market Operator (OMEL) from January 2002 to December 2005. Our empirical results are consistent with the model predictions and suggest that the supply function model better fits data than a discrete-bid auction model since large generators behave as price-makers irrespective whether they are the marginal firms at the auction.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 31 (2010)
Issue (Month): Number 4 ()
Other versions of this item:
- Espinosa Alejos, María Paz & Ciarreta Antuñano, Aitor, 2005. "A Supply Function Competition Model for the Spanish Wholesale Electricity Market," DFAEII Working Papers 2005-18, University of the Basque Country - Department of Foundations of Economic Analysis II.
- F0 - International Economics - - General
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