Integrating Energy Markets: Does Sequencing Matter?
AbstractThis paper addresses three questions that are relevant to integrating different regional transmission areas. Market integrating normally increases the number of competitors and should therefore reduce prices but the first section shows that prices could rise when the number of generators initially increases. Regulatory effort will also be affected by market integration. If the number of generators in either market is low, then our analysis suggests that the outcome depends on whether the regulators act independently or co-ordinate. Finally, if markets are gradually combined into larger units, the choice of transmission allocation (auctions or market coupling) will affect the prospects of making further gains and hence could lead to incomplete reform.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0442.
Date of creation: Jul 2004
Date of revision:
Note: CMI48, IO
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Web page: http://www.econ.cam.ac.uk/index.htm
Wholesale electricity markets; Market evolution; networks; market monitoring;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-02 (All new papers)
- NEP-COM-2004-08-02 (Industrial Competition)
- NEP-MIC-2004-08-02 (Microeconomics)
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.:
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