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Market power, fuel substitution and infrastructure – A large-scale equilibrium model of global energy markets

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  • Huppmann, Daniel
  • Egging, Ruud

Abstract

Assessing and quantifying the impacts of technological, economic, and policy shifts in the global energy system require large-scale numerical models. We propose a dynamic multi-fuel market equilibrium model that combines endogenous fuel substitution within demand sectors and in power generation, detailed infrastructure capacity constraints and investment, as well as strategic behaviour and market power aspects by suppliers in a unified framework. This model is the first of its kind in which market power is exerted across several fuels.

Suggested Citation

  • Huppmann, Daniel & Egging, Ruud, 2014. "Market power, fuel substitution and infrastructure – A large-scale equilibrium model of global energy markets," Energy, Elsevier, vol. 75(C), pages 483-500.
    • Handle: RePEc:eee:energy:v:75:y:2014:i:c:p:483-500
    DOI: 10.1016/j.energy.2014.08.004
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    More about this item

    Keywords

    Energy system model; Infrastructure investment; Strategic behaviour; Mixed complementarity problem (MCP); Generalized Nash equilibrium (GNE);
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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