The competitive role of the transmission system in price-regulated power industries
AbstractThis note shows how the transmission system can enhance competition in price-regulated power industries, thus extending earlier findings reported in the literature for deregulated industries. In the context of a two-technology, price-regulated power industry, we show that the interconnection of two markets initially supplied by a different monopoly reduces market power and raises welfare. We also show that the capacity of the transmission line plays a key role in determining whether market equilibrium lies closer to competition or monopoly.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 30 (2008)
Issue (Month): 4 (July)
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Web page: http://www.elsevier.com/locate/eneco
Other versions of this item:
- M. Soledad Arellano & Pablo Serra, 2005. "The Competitive Role of the Transmisión System in Price-regulated Power Industries," Documentos de Trabajo 214, Centro de Economía Aplicada, Universidad de Chile.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Berenstein, Severin & Bushnell, James & Stoft, Steven, 2000.
"The Competitive Effects of Transmission Capacity in a Deregulated Electricity Industry,"
Staff General Research Papers
13145, Iowa State University, Department of Economics.
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- Hogendorn, Christiaan, 2003. "Collusive Long-Run Investments under Transmission Price-Caps," Journal of Regulatory Economics, Springer, vol. 24(3), pages 271-91, November.
- M. Soledad Arellano & Pablo Serra, 2005. "Market Power in Price-Regulated Power Industries," Documentos de Trabajo 208, Centro de Economía Aplicada, Universidad de Chile.
- Joskow, Paul L & Tirole, Jean, 1999. "Transmission Rights and Market Power on Electric Power Networks I: Financial Rights," CEPR Discussion Papers 2093, C.E.P.R. Discussion Papers.
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