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Being in Balance: Economic Efficiency in the Dutch Power Market

Author

Listed:
  • Huurman, C.
  • Huisman, R.

Abstract

In this paper, we examine economic efficiency in the Dutch power market, an important pillar for successful creation of a competitive and non-discriminatory free power market. We examine historical time series of prices and volumes on the Dutch balancing market where energy companies are obliged to offer reserve capacity in order to offset power surpluses and deficits on the grid. We argue that these balancing prices and volumes are indicators for the level of economic efficiency. We find evidence that the level of economic efficiency has increased in the Dutch power market while the level of security of supply has maintained.

Suggested Citation

  • Huurman, C. & Huisman, R., 2004. "Being in Balance: Economic Efficiency in the Dutch Power Market," ERIM Report Series Research in Management ERS-2004-065-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:1493
    as

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    References listed on IDEAS

    as
    1. Green, Richard J & Newbery, David M, 1992. "Competition in the British Electricity Spot Market," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 929-953, October.
    2. David Boles De Boer & Lewis Evans, 1996. "The Economic Efficiency of Telecommunications in a Deregulated Market: The case of New Zealand," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 24-35, March.
    3. Catherine D. Wolfram, 1999. "Measuring Duopoly Power in the British Electricity Spot Market," American Economic Review, American Economic Association, vol. 89(4), pages 805-826, September.
    4. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    balancing power market; balancing prices; balancing volumes dynamics; deregulated energy markets; economic efficiency; indicators;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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