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The development of market power in the Spanish power generation sector: Perspectives after market liberalization

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  • Ciarreta, Aitor
  • Nasirov, Shahriyar
  • Silva, Carlos

Abstract

This paper provides a comprehensive analysis of the market power problem in the Spanish power generation sector and examines how and to which extent the market has developed in terms of market power concerns after the market liberalization reforms. The methodology applied in this study includes typical ex-post structural and behavioral measures employed to estimate potential for market power, namely: concentration ratios (CR) (for the largest and the three largest suppliers), the Herfindahl–Hirschman Index (HHI), Entropy, Pivotal Supply Index, the Residual Supply Index and Residual Demand Elasticity (RDE). The results are presented for the two largest Spanish generating companies (Endesa and Iberdrola) acting in the Iberian Electricity Market (MIBEL), and in the Spanish Day-ahead electricity market. The results show evidence that these companies have behaved much more competitively in recent periods than in the beginning of the market liberalization. In addition, the paper discusses important structural and regulatory changes through market liberalization processes in the Spanish Day-ahead electricity market.

Suggested Citation

  • Ciarreta, Aitor & Nasirov, Shahriyar & Silva, Carlos, 2016. "The development of market power in the Spanish power generation sector: Perspectives after market liberalization," Energy Policy, Elsevier, vol. 96(C), pages 700-710.
  • Handle: RePEc:eee:enepol:v:96:y:2016:i:c:p:700-710
    DOI: 10.1016/j.enpol.2016.06.029
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    References listed on IDEAS

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    Cited by:

    1. Szőke, Tamás & Hortay, Olivér & Balogh, Eszter, 2019. "Asymmetric price transmission in the Hungarian retail electricity market," Energy Policy, Elsevier, vol. 133(C).
    2. Manuel Uche-Soria & Carlos Rodríguez-Monroy, 2018. "Special Regulation of Isolated Power Systems: The Canary Islands, Spain," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-20, July.
    3. Wang, Qiang & Jiang, Xue-ting & Li, Rongrong, 2017. "Comparative decoupling analysis of energy-related carbon emission from electric output of electricity sector in Shandong Province, China," Energy, Elsevier, vol. 127(C), pages 78-88.
    4. Aleksandr Kokovikhin & Ekaterina Ogorodnikova & Dina Williams & Andrey Plakhin, 2018. "Assessment of the Competitive Environment in the Regional Markets," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 79-94.
    5. Li, Francis G.N. & Trutnevyte, Evelina, 2017. "Investment appraisal of cost-optimal and near-optimal pathways for the UK electricity sector transition to 2050," Applied Energy, Elsevier, vol. 189(C), pages 89-109.
    6. Ribó-Pérez, David & Van der Weijde, Adriaan H. & Álvarez-Bel, Carlos, 2019. "Effects of self-generation in imperfectly competitive electricity markets: The case of Spain," Energy Policy, Elsevier, vol. 133(C).
    7. Athanasios Dagoumas & Nikolaos Koltsaklis, 2020. "Zonal Pricing in Kazakhstan Power System with a Unit Commitment Model," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 24-36.
    8. Amoiralis, Eleftherios I. & Andriosopoulos, Kostas, 2017. "Challenges for a compliance officer in the liberalized EU energy market: A case study on the Greek gas transmission system operator," Energy Policy, Elsevier, vol. 110(C), pages 117-125.

    More about this item

    Keywords

    Competition; Market power; Spanish electricity market;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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