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Market Power in the Nordic Wholesale Electricity Market: A Survey of the Empirical Evidence

Author

Listed:
  • Fridolfsson, Sven-Olof

    (Research Institute of Industrial Economics (IFN))

  • Tangerås, Thomas

    (Research Institute of Industrial Economics (IFN))

Abstract

We review the recent empirical research concerning market power on the Nordic wholesale market for electricity, Nord Pool. There is no evidence of blatant and systematic exploitation of system level market power on Nord Pool. However, generation companies seem from time to time able to take advantage of capacity constraints in transmission to wield regional market power. Market power can manifest itself in a number of ways which have so far escaped empirical scrutiny. We discuss investment incentives, vertical integration and buyer power, as well as withholding of base-load (nuclear) capacity.

Suggested Citation

  • Fridolfsson, Sven-Olof & Tangerås, Thomas, 2008. "Market Power in the Nordic Wholesale Electricity Market: A Survey of the Empirical Evidence," Working Paper Series 773, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0773
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    Cited by:

    1. Zou, Peng & Chen, Qixin & Xia, Qing & He, Chang & Kang, Chongqing, 2015. "Incentive compatible pool-based electricity market design and implementation: A Bayesian mechanism design approach," Applied Energy, Elsevier, vol. 158(C), pages 508-518.
    2. Edquist, Harald & Henrekson, Magnus, 2013. "Product Market Reforms and Incentives to Innovate in Sweden," Working Paper Series 986, Research Institute of Industrial Economics.
    3. Weigt, Hannes, 2009. "A Review of Liberalization and Modeling of Electricity Markets," MPRA Paper 65651, University Library of Munich, Germany.
    4. Yanfei Li & Youngho Chang & Choo Fook Hoong & Swati Sharma, 2016. "Business Model and Market Design for ASEAN Electricity Market Integration: Principles, Practicalities, and Conditions for Success," Chapters, in: Yanfei Li & Shigeru Kimura (ed.), Achieving an Integrated Electricity Market in Southeast Asia: Addressing the Economic, Technical, Institutional, and Geo-political Barriers, chapter 3, pages 59-108, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Keywords

    Electricity Markets; Deregulation; Market Power; Hydro Power; Transmission Constraints;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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