IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2020-02-50.html
   My bibliography  Save this article

Electricity Industrial Organization: What About The Strategic Behavior Of Hydro And Thermal Operators?

Author

Listed:
  • Houeida Hedfi

    (LEGI-Polytechnic School of Tunisia, University of Carthage, Tunisia.)

  • Ahlem Dakhlaoui

    (LEGI-Polytechnic School of Tunisia, University of Carthage, Tunisia.)

Abstract

In this paper, we develop a two-period model where we analyze and compare a hydro/thermal electrical system under different industrial organization: monopoly, Cournot competition and collusion; under storage constraint, water availability constraint and thermal turbine capacity constraint. First, we prove that the technological complementarity has an important role in satisfying electricity demand in the different industrial organizations. Second, we show by the analytical resolution, that intertemporal private monopoly water transfer from off-peak season to peak season is not as high as the same transfer under a public monopoly and therefore this increases the market price. Under Cournot competition, an increase in the peak season demand implies a water transfer strategy from off-peak to peak season. The results of collusion show that the electricity price is less dependent on the hydropower capacity.

Suggested Citation

  • Houeida Hedfi & Ahlem Dakhlaoui, 2020. "Electricity Industrial Organization: What About The Strategic Behavior Of Hydro And Thermal Operators?," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 438-442.
    • Handle: RePEc:eco:journ2:2020-02-50
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/8775/4916
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/8775/4916
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Crampes, Claude & Moreaux, Michel, 2010. "Pumped storage and cost saving," Energy Economics, Elsevier, vol. 32(2), pages 325-333, March.
    2. Stefan Ambec & Joseph A. Doucet, 2003. "Decentralizing hydro power production," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(3), pages 587-607, August.
    3. Talat S. Genc & Henry Thille, 2011. "Dynamic Competition in Electricity Markets: Hydroelectric and Thermal Generation," Working Papers 1104, University of Guelph, Department of Economics and Finance.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robles, Jack, 2016. "Infinite horizon hydroelectricity games," Working Paper Series 5075, Victoria University of Wellington, School of Economics and Finance.
    2. Stefan Ambec & Claude Crampes, 2019. "Decarbonizing Electricity Generation with Intermittent Sources of Energy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1105-1134.
    3. Ambec, Stefan & Crampes, Claude, 2012. "Electricity provision with intermittent sources of energy," Resource and Energy Economics, Elsevier, vol. 34(3), pages 319-336.
    4. Stefan Ambec & Claude Crampes, 2010. "Electricity Production with Intermittent Sources of Energy," LERNA Working Papers 10.07.313, LERNA, University of Toulouse.
    5. Ambec, Stefan & Crampes, Claude, 2010. "Electricity Production with Intermittent Sources," IDEI Working Papers 608, Institut d'Économie Industrielle (IDEI), Toulouse.
    6. Abdessalem Abbassi & Ahlem Dakhlaoui & Nihed Ben Khalifa, 2023. "Risk Aversion and Hydro-energy Reservoirs Management under Monopolistic and Oligopolistic Industrial Structures," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 581-590, November.
    7. Moita, Rodrigo Menon Simões & Monte, Daniel, 2017. "Competition in cascades," Textos para discussão 456, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    8. Abbassi, Abdessalem & Dakhlaoui, Ahlem & Tamini, Lota D., 2014. "Risk Aversion and Dynamic Games Between Hydroelectric Operators under Uncertainty," Working Papers 172089, University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE).
    9. Genc, Talat S. & Thille, Henry & ElMawazini, Khaled, 2020. "Dynamic competition in electricity markets under uncertainty," Energy Economics, Elsevier, vol. 90(C).
    10. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    11. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. KLAUS ABBINK & MOLLER, Lars Christian & SARAH O'HARA, 2005. "The Syr Darya River Conflict: An Experimental Case Study," Discussion Papers 2005-14, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    13. Helm, Carsten & Mier, Mathias, 2021. "Steering the energy transition in a world of intermittent electricity supply: Optimal subsidies and taxes for renewables and storage," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    14. Nyamdash, Batsaikhan & Denny, Eleanor, 2013. "The impact of electricity storage on wholesale electricity prices," Energy Policy, Elsevier, vol. 58(C), pages 6-16.
    15. Klaus Abbink & Lars Moller & Sarah O’Hara, 2010. "Sources of Mistrust: An Experimental Case Study of a Central Asian Water Conflict," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 283-318, February.
    16. Haddad, Mohamed S., 2011. "Capacity choice and water management in hydroelectricity systems," Energy Economics, Elsevier, vol. 33(2), pages 168-177, March.
    17. van Ackere, Ann & Ochoa, Patricia, 2010. "Managing a hydro-energy reservoir: A policy approach," Energy Policy, Elsevier, vol. 38(11), pages 7299-7311, November.
    18. Ming, Zeng & Junjie, Feng & Song, Xue & Zhijie, Wang & Xiaoli, Zhu & Yuejin, Wang, 2013. "Development of China's pumped storage plant and related policy analysis," Energy Policy, Elsevier, vol. 61(C), pages 104-113.
    19. Crampes, Claude & Moreaux, Michel, 2008. "Pumping Water to Compete in Electricity Markets," IDEI Working Papers 507, Institut d'Économie Industrielle (IDEI), Toulouse.
    20. Abrell, Jan & Rausch, Sebastian & Streitberger, Clemens, 2019. "Buffering volatility: Storage investments and technology-specific renewable energy support," Energy Economics, Elsevier, vol. 84(S1).

    More about this item

    Keywords

    Electricity market; Monopoly; Competition; Collusion; Hydro; Thermal.;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2020-02-50. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.