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Inflow Uncertainty in Hydropower Markets

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  • Petter Vegard Hansen

Abstract

We analyse the effects of uncertainty on market performance in hydropower systems under alternative assumptions about market structure. Uncertainty creates distinct possibilities for exercising market power that cannot be captured in deterministic models. The qualitative and quantitative features of these possibilities depend on the characteristics of residual demand facing individual firms, which again depends on consumer preferences and generation and transmission technologies. Copyright © The editors of the "Scandinavian Journal of Economics" 2009 .

Suggested Citation

  • Petter Vegard Hansen, 2009. "Inflow Uncertainty in Hydropower Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(1), pages 189-207, March.
  • Handle: RePEc:bla:scandj:v:111:y:2009:i:1:p:189-207
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    References listed on IDEAS

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    1. Cardell, Judith B. & Hitt, Carrie Cullen & Hogan, William W., 1997. "Market power and strategic interaction in electricity networks," Resource and Energy Economics, Elsevier, vol. 19(1-2), pages 109-137, March.
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    7. Hoel, Michael, 1991. "Union Wage Policy: The Importance of Labour Mobility and the Degree of Centralization," Economica, London School of Economics and Political Science, pages 139-153.
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    Cited by:

    1. Robles, Jack, 2016. "Infinite horizon hydroelectricity games," Working Paper Series 5075, Victoria University of Wellington, School of Economics and Finance.
    2. Mauritzen, Johannes & Tangerås, Thomas, 2014. "Real-time versus Day-ahead Market Power in a Hydro-based Electricity Market," Working Paper Series 1009, Research Institute of Industrial Economics.
    3. Jorge Balat & Juan E. Carranza & Juan D. Martin, 2015. "Dynamic and Strategic Behavior in Hydropower-Dominated Electricity Markets: Empirical Evidence for Colombia," BORRADORES DE ECONOMIA 012906, BANCO DE LA REPÚBLICA.

    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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