Market Power and Network Constraint in a Deregulated Electricity Market
This paper investigates the market power and the welfare performance of the deregulated wholesale electricity market of California between 1998 and 2000 by incorporating the structure of the transmission network. While Wolfram (1999), Borenstein, Bushnell, and Wolak (2002) and Joskow and Kahn (2002) treat the difference between the market price and the marginal production cost of the marginal generator as the indicator for market power, we decompose the difference into the market power and the inefficiency arising from the network constraint. Based on public data for the market from 1998 to 2000, we demonstrate that the welfare loss due to the finite transmission capacity accounts for 29-38% of the total annual welfare loss, while the remaining portion can be explained by the market power exercised by the generators.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): Volume 28 (2007)
Issue (Month): Number 2 ()
|Contact details of provider:|| Postal: 28790 Chagrin Blvd Ste 350, Cleveland, OH 44122, USA|
Web page: http://www.iaee.org
More information through EDIRC
|Order Information:||Web: http://www.iaee.org/en/publications/ejsearch.aspx|
When requesting a correction, please mention this item's handle: RePEc:aen:journl:2007v28-02-a01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Williams)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.