Pricing structure in the deregulated UK electricity market
AbstractAs residential energy markets open to competition, consumers can choose from a range of tariffs offered by different suppliers. We examine the relationship between the fixed charge levied on each consumer, and the variable charge per unit of energy used across all these tariffs. Data are the tariffs offered in April 2002 in the 14 electricity regions of Great Britain by seventeen suppliers, seven of whom operate nationally. Our analysis focuses on the revenue trade-off for the company. We identify the effect of payment method on the relationship between fixed and variable charge. We find significant effects of the distribution and transmission charges which the suppliers pay in each area, as well as the size of the market both by number of customers and area; and confirm that incumbents charge significantly more that entrants. We also find significant differences between the prepayment and credit tariffs.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0406002.
Length: 24 pages
Date of creation: 05 Jun 2004
Date of revision:
Note: Type of Document - pdf; pages: 24
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Energy Competition; Non Linear Pricing; Simultaneous Equation Models;
Other versions of this item:
- Evens Salies & Catherine Waddams Price, 2003. "Pricing structure in the deregulated UK electricity market," Sciences Po publications 03-6, Sciences Po.
- Salies, E. & Waddams Price, C., 2003. "Pricing Structures in the Deregulated UK Electricity Market," Working Papers 03/04, Department of Economics, City University London.
- L - Industrial Organization
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-07 (All new papers)
- NEP-COM-2004-06-07 (Industrial Competition)
- NEP-EEC-2004-06-07 (European Economics)
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.:
- Catherine Waddams & Ruth Hancock, 1998. "Distributional effects of liberalising UK residential utility markets," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 295-319, August.
- repec:ccp:journl:v:53:y:2001:i:2-3:p:209-223 is not listed on IDEAS
- Otero, Jesus & Waddams Price, Catherine, 2001. "Price Discrimination, Regulation and Entry in the UK Residential Electricity Market," Bulletin of Economic Research, Wiley Blackwell, vol. 53(3), pages 161-75, July.
- Evens Salies, 2008.
"Mergers in the GB electricity market: effects on retail charges,"
Taylor and Francis Journals, vol. 40(11), pages 1483-1490.
- Evens Salies, 2006. "Mergers in the GB electricity market: effects on retail charges," Documents de Travail de l'OFCE 2006-08, Observatoire Francais des Conjonctures Economiques (OFCE).
- Evens Salies, 2006. "Mergers in the GB Electricity Market: Effects on Retail Charges," Sciences Po publications 2006-8, Sciences Po.
- Evens SALIES, 2005. "The effect on retail charges of mergers in the GB electricity market," Econometrics 0506001, EconWPA.
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