Intégration latérale dans le secteur de l'énergie
This paper analyses mergers between gas and electricity activities, a "conglomerate relationship" in the Commission lingo. We first review the paradigmatic case of the recent failed takeover on Endesa by Gas Natural in Spain. Then, we detail a model of imperfect competition combining four production units: an importer of natural gas selling to final consumers, an importer of natural gas selling to the electricity industry, a gas-turbine electricity producer, and a non-gas electricity producer. On the consumer side, gas and electricity are imperfect substitutes. We successively analyze the dispatch of the four units i) at first best, ii) by a private monopoly, iii) by an oligopoly, iv) by an upstream gas monopoly facing downstream competition, and v) by a bilateral monopoly. We emphasize the paramount role of the price for intermediary gas and suggest that the supply of bulk gas and retail gas should be separated. JEL codes: G34, L22, L94, L95.
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