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Nuclear Capacity Auctions

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  • Sven-Olof Fridolfsson and Thomas P. Tangeras

Abstract

We propose nuclear capacity auctions as a means to correcting the incentives for investing in nuclear power. In particular, capacity auctions open the market for large-scale entry by outside firms. Requiring licensees to sell a share of capacity as virtual power plant contracts increases auction efficiency by mitigating incumbent producers' incentive to bid for market power. A motivating example is Sweden's policy reversal to allow new nuclear power to replace old reactors.

Suggested Citation

  • Sven-Olof Fridolfsson and Thomas P. Tangeras, 2015. "Nuclear Capacity Auctions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    • Handle: RePEc:aen:journl:ej36-3-tangeras
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    Cited by:

    1. Erik Lundin, 2021. "Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden," Journal of Industrial Economics, Wiley Blackwell, vol. 69(3), pages 485-536, September.
    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. Yusuke Ikuta & Takashi Yanagawa, 2023. "Ownership structure of nuclear power plants for fair competition and efficiency: private low-cost access versus public ownership," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 307-330, February.

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