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The Influence of Vertical Integration and Property Rights on Network Access Charges in the German Electricity Market

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Author Info

  • Christian Growitsch

    ()
    (University of Lueneburg)

  • Thomas Wein

    ()
    (University of Lueneburg)

Abstract

After the deregulation of the German electricity markets, network access charges are based on contractual arrangements between energy producers and industrial consumers. As the electricity networks are incontestable natural monopolies, the operators are able to set (monopolistic) charges at their own discretion, restricted only by possible cartel office interferences. Estimations show a relation between network access charges and operator's economic independence as well as level of vertical integration: on the low voltage level for an annual consumption of 1700 kW/h, vertically integrated firms set significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 224 (2004)
Issue (Month): 6 (November)
Pages: 673-695

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Handle: RePEc:jns:jbstat:v:224:y:2004:i:6:p:673-695

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Keywords: Network access charges; deregulation; electricity market;

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  1. Glazer, Amihai & McMillan, Henry, 1992. "Pricing by the Firm under Regulatory Threat," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 1089-99, August.
  2. Brunekreeft, G., 2002. "Regulatory Threat in Vertically Related Markets; The Case of German Electricity," Cambridge Working Papers in Economics 0228, Faculty of Economics, University of Cambridge.
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