IDEAS home Printed from https://ideas.repec.org/p/hhs/hastef/0217.html

Competition and Prices on the Emerging Nordic Electricity Market

Author

Listed:
  • Amundsen, Eirik S.

    (Department of Economics)

  • Bergman, Lars

    (Dept. of Economics, Stockholm School of Economics)

  • Andersson, Bo

    (Dept. of Economics, Stockholm School of Economics)

Abstract

The purpose of this paper is to quantitatively evaluate the impact on electricity prices of deregulation and free trade in the Nordic countries. The analysis is focused on the impact of increased competition on market power and the degree of monopolistic pricing. The major tool for our analysis of electricity trade and prices is a numerical multicountry electricity market model in which losses and bottlenecks in the transmission system are taken into account. Moreover both Cournot and perfect competition equilibria with and without free trade in electricity can be simulated. According to the simulation results there are significant differences between the Cournot and perfect competition equilibrium prices under autarky. When inter-country trade is allowed, however, the Cournot equilibrium prices are quite close to the equilibrium prices under perfect competition. Yet the net inter-country physical flows of electricity are small and well within existing transmission capacities.

Suggested Citation

  • Amundsen, Eirik S. & Bergman, Lars & Andersson, Bo, 1998. "Competition and Prices on the Emerging Nordic Electricity Market," SSE/EFI Working Paper Series in Economics and Finance 217, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0217
    as

    Download full text from publisher

    File URL: http://swopec.hhs.se/hastef/papers/hastef0217.pdf.zip
    File Function: Complete Rendering
    Download Restriction: no
    File URL: http://swopec.hhs.se/hastef/papers/hastef0217.pdf
    File Function: Complete Rendering
    Download Restriction: no
    File URL: http://swopec.hhs.se/hastef/papers/hastef0217.ps.zip
    File Function: Complete Rendering
    Download Restriction: no
    File URL: http://swopec.hhs.se/hastef/papers/hastef0217.ps
    File Function: Complete Rendering
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. Bergman, Lars & Andersson, Bo, 1995. "Market Structure and the Price of Electricity: An ex ante Analysis of the deregulated Swedish Electricity Market," SSE/EFI Working Paper Series in Economics and Finance 47, Stockholm School of Economics.
    3. repec:aen:journl:1995v16-02-a05 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kopsakangas-Savolainen, Maria, 2004. "The welfare effects of different pricing schemes for electricity distribution in Finland," Energy Policy, Elsevier, vol. 32(12), pages 1429-1435, August.
    2. Hooper, Elizabeth & Medvedev, Andrei, 2009. "Electrifying integration: Electricity production and the South East Europe regional energy market," Utilities Policy, Elsevier, vol. 17(1), pages 24-33, March.
    3. Nepal, Rabindra & Jamasb, Tooraj, 2012. "Interconnections and market integration in the Irish Single Electricity Market," Energy Policy, Elsevier, vol. 51(C), pages 425-434.
    4. Lundgren, Jens & Hellström, Jörgen & Rudholm, Niklas, 2008. "Multinational Electricity Market Integration and Electricity Price Dynamics," HUI Working Papers 16, HUI Research.
    5. Hjalmarsson, Erik, 2000. "Nord Pool: A Power Market Without Market Power," Working Papers in Economics 28, University of Gothenburg, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sulamaa, Pekka, . "Essays in Deregulated Finnish and Nordic Electricity Markets," ETLA A, The Research Institute of the Finnish Economy, number 34, June.
    2. Henryk Kierzkowski, 1988. "Strategic Trade, Embargoes, and Imperfect Competition," NBER Chapters, in: Issues in US-EC Trade Relations, pages 133-152, National Bureau of Economic Research, Inc.
    3. E. Young Song, 2005. "Temporary Protection and Technology Choice under the Learning Curve," Review of International Economics, Wiley Blackwell, vol. 13(2), pages 391-396, May.
    4. Krzysztof Kosiec, 2016. "Liberalisation of International Trade – The Case of Asymmetric Countries," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(3), pages 143-160, September.
    5. Eden, Benjamin, 2007. "Inefficient trade patterns: Excessive trade, cross-hauling and dumping," Journal of International Economics, Elsevier, vol. 73(1), pages 175-188, September.
    6. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    7. Lutz, Stefan, 1998. "Can taxing foreign competition harm the domestic industry?," ZEI Working Papers B 15-1998, University of Bonn, ZEI - Center for European Integration Studies.
    8. Bernard, Jean-Thomas & Dupéré, Marc & Roland, Michel, 2003. "International Competition between Public or Mixed Enterprises," Cahiers de recherche 0301, Université Laval - Département d'économique.
    9. Bowei Guo & Giorgio Castagneto Gissey, 2019. "Cost Pass-through in the British Wholesale Electricity Market: Implications of Brexit and the ETS reform," Working Papers EPRG1937, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    10. Tobias D. Ketterer, 2016. "EU Anti-dumping and Tariff Cuts: Trade Policy Substitution?," The World Economy, Wiley Blackwell, vol. 39(5), pages 576-596, May.
    11. Pierre-Philippe Combes & Bernard Caillaud & Bruno Jullien, 1997. "Common Market with Regulated Firms," Annals of Economics and Statistics, GENES, issue 47, pages 65-99.
    12. Onur A. Koska & Ngo Van Long & Frank Stähler, 2018. "Foreign direct investment as a signal," Review of International Economics, Wiley Blackwell, vol. 26(1), pages 60-83, February.
    13. Pravin Krishna, 1998. "Regionalism and Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 227-251.
    14. Žigić, Krešimir, 2011. "Does a ‘non-committed’ government always generate lower social welfare than its ‘committed’ counterpart? Strategic trade policy when consumer surplus matters," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 533-556.
    15. Abdul Azhar & Robert Elliott, 2003. "On the measurement of trade-induced adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(3), pages 419-439, September.
    16. Nathalie Jorzik & Frank Mueller‐Langer, 2020. "Multilateral stability and efficiency of trade agreements: A network formation approach," The World Economy, Wiley Blackwell, vol. 43(2), pages 355-370, February.
    17. Stefano Cascino & Ane Tamayo & Felix Vetter, 2021. "Labor Market Effects of Spatial Licensing Requirements: Evidence from CPA Mobility," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 59(1), pages 111-161, March.
    18. Villena, Marcelo J. & Araneda, Axel A., 2017. "Dynamics and stability in retail competition," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 134(C), pages 37-53.
    19. Qianqian Shao & Thorsten Janus & Maarten J. Punt & Justus Wesseler, 2018. "The Conservation Effects of Trade with Imperfect Competition and Biased Policymakers," Agriculture, MDPI, vol. 8(7), pages 1-22, July.
    20. Bahar, Dany & Hausmann, Ricardo & Hidalgo, Cesar A., 2014. "Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?," Journal of International Economics, Elsevier, vol. 92(1), pages 111-123.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:hastef:0217. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Helena Lundin (email available below). General contact details of provider: https://edirc.repec.org/data/erhhsse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.