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Market power and integrated regional markets of electricity: a simulation of the MIBEL

Author

Listed:
  • Marta Ferreira Dias

    (GOVCOPP, DEGEIT, University of Aveiro)

  • Silvia F. Jorge

    (GOVCOPP, DEGEIT, University of Aveiro)

Abstract

We consider a partial equilibrium model where we study the integration of two oligopolistic markets that are not symmetric (in number of ?rms, in demand or market dimension). We present a simulation for the integration of the Iberian wholesale electricity market (MIBEL) and show how the exercise of market power will evolve with regional full integration. The simulation results show that, as expected, market power is lower after full integration. However, even after full integration, market power is still a feature of the market. There fore, the full bene?ts of liberalisation and integration are not seized by the consumers since wholesale prices persist to be higher than marginal costs.

Suggested Citation

  • Marta Ferreira Dias & Silvia F. Jorge, 2017. "Market power and integrated regional markets of electricity: a simulation of the MIBEL," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(2), pages 45-67, November.
    • Handle: RePEc:sek:jijoes:v:6:y:2017:i:2:p:45-67
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L49 - Industrial Organization - - Antitrust Issues and Policies - - - Other
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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