Competition in the British Electricity Spot Market
The British electricity supply industry has, with the exception of Nuclear Electric, now been privatized. Bulk supplies of electricity are traded between two dominant generators and many suppliers in an unregulated `pool'. The generators submit a supply schedule of prices for each generating set and receive the market clearing price, which varies with demand over time. It has been claimed that such Bertrand competition should be highly competitive, bit we show that the Nash equilibrium in supply schedules implies a high mark-up on marginal cost and very substantial deadweight losses.
|Date of creation:||May 1991|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:557. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.