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Market power in the Nordic electricity wholesale market: A survey of the empirical evidence

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  • Fridolfsson, Sven-Olof
  • Tangerås, Thomas P.

Abstract

We review the recent empirical research assessing market power on the Nordic wholesale market for electricity, Nord Pool. The studies find no evidence of systematic exploitation of system level market power on Nord Pool. Local market power arising from transmission constraints seems to be more problematic in some price areas across the Nordic countries. Market power can manifest itself in a number of ways that have so far escaped empirical scrutiny. We discuss investment incentives, vertical integration and buyer power, as well as withholding of base-load (nuclear) capacity.

Suggested Citation

  • Fridolfsson, Sven-Olof & Tangerås, Thomas P., 2009. "Market power in the Nordic electricity wholesale market: A survey of the empirical evidence," Energy Policy, Elsevier, vol. 37(9), pages 3681-3692, September.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:9:p:3681-3692
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    Citations

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    Cited by:

    1. Gianfreda, Angelica & Grossi, Luigi, 2012. "Forecasting Italian electricity zonal prices with exogenous variables," Energy Economics, Elsevier, vol. 34(6), pages 2228-2239.
    2. Vítor Marques & Adelino Fortunato & Isabel Soares, 2010. "Application of a structural model to a wholesale electricity market: The Spanish market from January 1999 to June 2007," GEMF Working Papers 2011-02, GEMF, Faculty of Economics, University of Coimbra.
    3. Nielsen, Steffen & Sorknæs, Peter & Østergaard, Poul Alberg, 2011. "Electricity market auction settings in a future Danish electricity system with a high penetration of renewable energy sources – A comparison of marginal pricing and pay-as-bid," Energy, Elsevier, vol. 36(7), pages 4434-4444.
    4. Egil Ferkingstad & Anders L{o}land & Mathilde Wilhelmsen, 2011. "Causal modeling and inference for electricity markets," Papers 1110.5429, arXiv.org.
    5. Fogelberg, Sara & Lazarczyk, Ewa, 2014. "Strategic Withholding through Production Failures," Working Paper Series 1015, Research Institute of Industrial Economics.
    6. Vítor Marques & Isabel Soares & Adelino Fortunato, 2012. "Application of a Structural Model to the Spanish Electricity Wholesale Market," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 65-108.
    7. Petr Spodniak & Mikael Collan & Mari Makkonen, 2017. "On Long-Term Transmission Rights in the Nordic Electricity Markets," Energies, MDPI, Open Access Journal, vol. 10(3), pages 1-19, March.
    8. Söderholm, Patrik & Wårell, Linda, 2011. "Market opening and third party access in district heating networks," Energy Policy, Elsevier, vol. 39(2), pages 742-752, February.
    9. Egil Ferkingstad & Anders L{o}land, 2014. "Coping with area price risk in electricity markets: Forecasting Contracts for Difference in the Nordic power market," Papers 1406.6862, arXiv.org.
    10. Liu, Zhen & Zhang, Xiliang & Lieu, Jenny, 2010. "Design of the incentive mechanism in electricity auction market based on the signaling game theory," Energy, Elsevier, vol. 35(4), pages 1813-1819.
    11. Di Cosmo, Valeria & Lynch, Muireann Á., 2016. "Competition and the single electricity market: Which lessons for Ireland?," Utilities Policy, Elsevier, vol. 41(C), pages 40-47.
    12. Sven-Olof Fridolfsson and Thomas P. Tangeras, 2015. "Nuclear Capacity Auctions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    13. Sherzod Tashpulatov & Lubomir Lizal, 2012. "Can Producers Apply a Capacity Cutting Strategy to Increase Prices? The Case of the England and Wales Electricity Market," CERGE-EI Working Papers wp465, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Niklas, Rudholm, 2015. "Pricing in the Swedish Retail Market for Electricity," HUI Working Papers 113, HUI Research.
    15. Lízal, Lubomír M. & Tashpulatov, Sherzod N., 2014. "Do producers apply a capacity cutting strategy to increase prices? The case of the England and Wales electricity market," Energy Economics, Elsevier, vol. 43(C), pages 114-124.
    16. repec:ers:journl:v:xv:y:2012:i:sie:p:65-108 is not listed on IDEAS
    17. Ferkingstad, Egil & Løland, Anders & Wilhelmsen, Mathilde, 2011. "Causal modeling and inference for electricity markets," Energy Economics, Elsevier, vol. 33(3), pages 404-412, May.
    18. Macuchova, Zuzana & Rudholm, Niklas & Tang, Aili, 2014. "Firm growth in the Swedish energy sector: Will large firms become even more dominant?," HUI Working Papers 104, HUI Research.

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