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Does vertical integration have an effect on load factors ? – A test on coal-fired plants in England & Wales

Author

Listed:
  • José López

    (Servicio de Radiodiagnostico Preteimagen)

  • Evens Salies

    (Observatoire français des conjonctures économiques)

Abstract

Today in the British electricity industry, most electricity suppliers hedge a large proportion of their residential customer base requirements by owning their own plant. The non-storability of electricity and the corresponding need for an instantaneous matching of generation and consumption creates a business need for integration. From a sample of half-hour data on load factor for coal-fired power plants in England and Wales, this paper tests the hypothesis that vertical integration with retail businesses affects the extent to which producers utilize their capacity. We also pay attention to this potential effect during periods of peak demand.

Suggested Citation

  • José López & Evens Salies, 2006. "Does vertical integration have an effect on load factors ? – A test on coal-fired plants in England & Wales," Sciences Po publications 2006-3, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/7069
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    Keywords

    panel data; vertical integration; electricity supply;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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