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Why (and how) to regulate Power Exchanges in the EU market integration context?

  • Leonardo Meeus

Power Exchanges (PXs) are key market institutions in open and market-based electricity industries. This paper aims at contributing to the ongoing debate on why and how to regulate Power Exchanges in the EU market integration context. . The paper starts by stating that two different types of PXs have to be distinguished, i.e. "Merchant" PXs and the "Cost of Service Regulated" PXs. The paper continues by comparing the typical incentives of these two types of PXs to perform the basic PX tasks in an isolated national market and in a market integration context. The paper concludes by deriving from this analytical frame the most relevant regulatory actions..

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Paper provided by European University Institute in its series RSCAS Working Papers with number 2010/12.

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Date of creation: 29 Jan 2010
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Handle: RePEc:rsc:rsceui:2010/12
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Web page: http://www.eui.eu/RSCAS/

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  1. Hogan, William W, 1992. "Contract Networks for Electric Power Transmission," Journal of Regulatory Economics, Springer, vol. 4(3), pages 211-42, September.
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  12. Randall S. Kroszner, 1999. "Can the Financial Markets Privately Regulate Risk? The Development of Derivatives Clearing Houses and Recent Over-the Counter Innovations," CRSP working papers 493, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
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  14. Jens Nystedt, 2004. "Derivative Market Competition; OTC Versus Organized Derivative Exchanges," IMF Working Papers 04/61, International Monetary Fund.
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  17. Thomas H. McInish & Robert A. Wood, 1996. "Competition, Fragmentation, and Market Quality," NBER Chapters, in: The Industrial Organization and Regulation of the Securities Industry, pages 63-92 National Bureau of Economic Research, Inc.
  18. Meeus, L. & Vandezande, L. & Cole, S. & Belmans, R., 2009. "Market coupling and the importance of price coordination between power exchanges," Energy, Elsevier, vol. 34(3), pages 228-234.
  19. Meeus, Leonardo & Purchala, Konrad & Belmans, Ronnie, 2005. "Development of the Internal Electricity Market in Europe," The Electricity Journal, Elsevier, vol. 18(6), pages 25-35, July.
  20. Meeus, Leonardo & Verhaegen, Karolien & Belmans, Ronnie, 2009. "Block order restrictions in combinatorial electric energy auctions," European Journal of Operational Research, Elsevier, vol. 196(3), pages 1202-1206, August.
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