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Competition in Retail Electricity Markets : An Assessment of Ten Years Dutch Experience

Author

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  • Willems, Bert

    (Tilburg University, Center For Economic Research)

  • Mulder, M.

Abstract

This paper examines a decade of retail competition in the Dutch electricity market and discusses market structure, regulation, and market performance. We find a proliferation of product variety, in particular by the introduction of quality-differentiated green-energy products. Product innovation could be a sign of a well-functioning market that caters to customer’s preferences, but it can also indicate a strategic product differentiation to soften price competition. Although slightly downward trending, gross retail margins remain relatively high, especially for green products. Price dispersion across retailers for identical products remains high, as also across products for a single retailer. We do not find evidence of asymmetric pass-through of wholesale costs. Overall, the retail market matured as evidenced by fewer consumer complaints and higher switching rates. A fairly intensive regulation of mature energy retail markets appears to be needed to create benefits for consumers.

Suggested Citation

  • Willems, Bert & Mulder, M., 2016. "Competition in Retail Electricity Markets : An Assessment of Ten Years Dutch Experience," Discussion Paper 2016-022, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:3ad2b6cb-a770-44c9-be7e-5d0686a2078c
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nillesen, P. & Pollitt, M., 2019. "Ownership Unbundling of Electricity Distribution Networks," Cambridge Working Papers in Economics 1905, Faculty of Economics, University of Cambridge.
    2. repec:eee:enepol:v:118:y:2018:i:c:p:298-311 is not listed on IDEAS
    3. Brown, David P. & Eckert, Andrew, 2018. "The effect of default rates on retail competition and pricing decisions of competitive retailers: The case of Alberta," Energy Policy, Elsevier, vol. 118(C), pages 298-311.

    More about this item

    Keywords

    retail electricity market; competition; regulation; ex-post assessment;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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