IDEAS home Printed from https://ideas.repec.org/p/hhs/osloec/2009_017.html

Energy in a Bathtub: Electricity Trade between Countries with Different Generation Technologies

Author

Listed:
  • Førsund, Finn R.

    (Dept. of Economics, University of Oslo)

Abstract

Many countries have followed a policy of being self-sufficient in electricity. However, in the last two decades exchange of electricity across borders has become more widespread, and the European Union's policy is to encourage a gradual expansion of crossborder trading and integration of electricity markets. It is therefore of interest to study what happens with the price formation in home markets when borders are opened up for trade in electricity and generating technologies differ. There is a common international market, Nord Pool, between the Nordic countries since 1996, and trade now takes place between many European countries on a bilateral basis. A stylised general equilibrium model of trade of electricity between two countries; Hydro and Thermal, with hydro and thermal technologies, is used to investigate price and quantity consequences going from autarky to trade in a competitive market, as revealed by using a social planning perspective for cooperation between countries.

Suggested Citation

  • Førsund, Finn R., 2009. "Energy in a Bathtub: Electricity Trade between Countries with Different Generation Technologies," Memorandum 17/2009, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2009_017
    as

    Download full text from publisher

    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2009/Memo-17-2009.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nils-Henrik M. von der Fehr & Eirik S. Amundsen & Lars Bergman, 2005. "The Nordic Market: Signs of Stress?," The Energy Journal, , vol. 26(1_suppl), pages 71-98, June.
    2. Amundsen, Eirik S. & Bergman, Lars, 2007. "Integration of multiple national markets for electricity: The case of Norway and Sweden," Energy Policy, Elsevier, vol. 35(6), pages 3383-3394, June.
    3. repec:bla:scandj:v:99:y:1997:i:2:p:281-97 is not listed on IDEAS
    4. repec:aen:journl:2006v27-04-a06 is not listed on IDEAS
    5. Førsund, Finn R. & Singh, Balbir & Jensen, Trond & Larsen, Cato, 2008. "Phasing in wind-power in Norway: Network congestion and crowding-out of hydropower," Energy Policy, Elsevier, vol. 36(9), pages 3514-3520, September.
    6. repec:aen:journl:2008v29-02-a01 is not listed on IDEAS
    7. James Bushnell, 2003. "A Mixed Complementarity Model of Hydrothermal Electricity Competition in the Western United States," Operations Research, INFORMS, vol. 51(1), pages 80-93, February.
    8. Crampes, C. & Moreaux, M., 2001. "Water resource and power generation," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 975-997, May.
    9. Amundsen, Eirik S. & Bergman, Lars, 2006. "Why has the Nordic electricity market worked so well?," Utilities Policy, Elsevier, vol. 14(3), pages 148-157, September.
    10. repec:aen:journl:2005se-a02 is not listed on IDEAS
    11. Severin Borenstein & James B. Bushnell & Frank A. Wolak, 2002. "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," American Economic Review, American Economic Association, vol. 92(5), pages 1376-1405, December.
    12. repec:aen:journl:2005se-a04 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    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. Finn R. Førsund, 2015. "Hydropower Economics," International Series in Operations Research and Management Science, Springer, edition 2, number 978-1-4899-7519-5, August.
    2. Sandsmark, Maria, 2009. "A regional energy paradox--the case of Central Norway," Energy Policy, Elsevier, vol. 37(11), pages 4549-4556, November.
    3. Thomas P. Tangerås & Johannes Mauritzen, 2018. "Real‐time versus day‐ahead market power in a hydro‐based electricity market," Journal of Industrial Economics, Wiley Blackwell, vol. 66(4), pages 904-941, December.
    4. Hassanzadeh Moghimi, Farzad & Boomsma, Trine K. & Siddiqui, Afzal S., 2024. "Transmission planning in an imperfectly competitive power sector with environmental externalities," Energy Economics, Elsevier, vol. 134(C).
    5. Nils-Henrik M. von der Fehr & Petter Vegard Hansen, 2010. "Electricity Retailing in Norway," The Energy Journal, , vol. 31(1), pages 25-46, January.
    6. Farzad Hassanzadeh Moghimi & Yihsu Chen & Afzal S. Siddiqui, 2023. "Flexible supply meets flexible demand: prosumer impact on strategic hydro operations," Computational Management Science, Springer, vol. 20(1), pages 1-35, December.
    7. Amundsen, Eirik S. & Bergman, Lars, 2007. "Provision of operating reserve capacity: Principles and practices on the Nordic Electricity Market," MPRA Paper 10861, University Library of Munich, Germany.
    8. Zhile Jiang & Xinhao Nie & Stratis Skoulakis, 2026. "The Welfare Gap of Strategic Storage: Universal Bounds and Price Non-Linearity," Papers 2602.19660, arXiv.org.
    9. Finn R. Førsund, 2006. "The Anatomy of Market Power in Electricity Markets with Hydropower as Dominating Technology," ICER Working Papers 21-2006, ICER - International Centre for Economic Research.
    10. Robles, Jack, 2016. "Infinite horizon hydroelectricity games," Working Paper Series 5075, Victoria University of Wellington, School of Economics and Finance.
    11. Wang, Aijia & Mah, Daphne Ngar-yin, 2026. "A systematic review on varieties, effectiveness and determinants of consumer engagement in the context of electricity market reforms from a European-Asian comparative perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 226(PD).
    12. Kosnik, Lea, 2008. "Consolidation and ownership trends of nonfederal hydropower generating assets, 1980-2003," Energy Economics, Elsevier, vol. 30(3), pages 715-731, May.
    13. Schill, Wolf-Peter & Kemfert, Claudia, 2011. "Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(3), pages 59-87.
    14. Amundsen, Eirik S. & Bergman, Lars, 2006. "Why has the Nordic electricity market worked so well?," Utilities Policy, Elsevier, vol. 14(3), pages 148-157, September.
    15. Matti Liski & Iivo Vehviläinen, 2016. "Gone with the Wind? An Empirical Analysis of the Renewable Energy Rent Transfer," CESifo Working Paper Series 6250, CESifo.
    16. Debia, Sébastien & Pineau, Pierre-Olivier & Siddiqui, Afzal S., 2021. "Strategic storage use in a hydro-thermal power system with carbon constraints," Energy Economics, Elsevier, vol. 98(C).
    17. Poletti, Stephen, 2021. "Market Power in the New Zealand electricity wholesale market 2010–2016," Energy Economics, Elsevier, vol. 94(C).
    18. Rangel, Luiz Fernando, 2008. "Competition policy and regulation in hydro-dominated electricity markets," Energy Policy, Elsevier, vol. 36(4), pages 1292-1302, April.
    19. Oseni, Musiliu O. & Pollitt, Michael G., 2014. "Institutional arrangements for the promotion of regional integration of electricity markets : international experience," Policy Research Working Paper Series 6947, The World Bank.
    20. Alfredo Garcia & Enrique Campos-Nañez & James Reitzes, 2005. "Dynamic Pricing and Learning in Electricity Markets," Operations Research, INFORMS, vol. 53(2), pages 231-241, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:osloec:2009_017. 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: Mari Strønstad Øverås (email available below). General contact details of provider: https://edirc.repec.org/data/souiono.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.