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How to play the game as the bridge between two European power markets – the case of Western Denmark

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Author Info

  • Amundsen, Eirik S.

    ()
    (University of Bergen, Department of Economics)

  • Donslund, Bjarne

    ()
    (Eltra)

  • Olsen, Ole Jess

    ()
    (Department of Environment, Technology and Social Studies, Roskilde University)

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    Abstract

    In this paper we set out to investigate the price and quantity fluctuations in Western Denmark, which took place during the winter season 2002-2003. This was a period, which exhibited critical supply conditions in the Nordic area due to a shortage of hydropower. On average, the market in Western Denmark helped to ease the situation by large net exports. However, a more detailed investigation reveals anomalies in market behaviour that do not fit well into this overall positive description of the situation. Several explanations of the anomalies are offered. These may work separately or act in concert. In particular, we look at the large capacity of volatile wind power; the role of the guaranteed fixed prices and the design and functioning of the special auction system of transmission capacity in the interface between Western Denmark and Germany.

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    File URL: http://www.uib.no/filearchive/No.%2002-05.pdf
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    Bibliographic Info

    Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 02/05.

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    Length: 29 pages
    Date of creation: 14 Mar 2005
    Date of revision:
    Handle: RePEc:hhs:bergec:2005_002

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    Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
    Phone: (+47)55589200
    Fax: (+47)55589210
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    Web page: http://www.uib.no/econ/en
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    Related research

    Keywords: electricity trade; market power; wind power;

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