Liberalising the energy markets of Western Europe : a computable equilibrium model approach
AbstractUsing a computable equilibrium model, the short-run effects of a radical liberalization of the West European natural gas and electricity markets are examined. In each model country, oil, gas, coal and electricity are produced, traded and consumed. There are world markets for oil and coal, and well-integrated competitive markets for gas and electricity in Western Europe. Gas and electricity are transported and traded across markets under the assumption of ideal third-party access regimes for transportation and limited capacities in the transportation networks. It is found that relative to the data year 1996, radical liberalization reduces the average end-user price of natural gas by around 20%, and the average end-user price of electricity by around 50%. The supply of electricity increases by around 20%, mainly due to increased coal power production. After such liberalization, coal power emerges with the largest market share of electricity production in Western Europe.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 14/2001.
Date of creation: 2001
Date of revision:
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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Other versions of this item:
- Finn Roar Aune & Rolf Golombek & Sverre Kittelsen & Knut Einar Rosendahl, 2004. "Liberalizing the energy markets of Western Europe - a computable equilibrium model approach," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2137-2149.
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