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Price transmission in the UK electricity market : was NETA beneficial?

Author

Listed:
  • Giulietti, Monica

    (Nottingham University Business School)

  • Grossi, Luigi

    (University of Verona)

  • Waterson, Michael

    (University of Warwick)

Abstract

This paper explores the relationship between domestic retail electricity prices in Great Britain and their determinants in the particular context of the New Electricity Trading Arrangements (NETA) introduced in 2001. The analysis requires a consistent comparison of wholesale power price series before and after NETA, which we investigate using a range of wholesale future price series. Despite its stated intention of reducing prices, we conclude that the net effect of NETA alongside other developments instead merely rearranged where money was made in the system.

Suggested Citation

  • Giulietti, Monica & Grossi, Luigi & Waterson, Michael, 2009. "Price transmission in the UK electricity market : was NETA beneficial?," The Warwick Economics Research Paper Series (TWERPS) 913, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:913
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Paul Deane, John FitzGerald, Laura Malaguzzi Valeri, Aidan Tuohy and Darragh Walsh, 2015. "Irish and British electricity prices: what recent history implies for future prices," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    2. Richard Benjamin, 2016. "Tacit Collusion in Electricity Markets with Uncertain Demand," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 69-93, February.
    3. Richard Benjamin, 2016. "Tacit Collusion in Electricity Markets with Uncertain Demand," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 69-93, February.
    4. Gianfreda, Angelica & Grossi, Luigi, 2012. "Forecasting Italian electricity zonal prices with exogenous variables," Energy Economics, Elsevier, vol. 34(6), pages 2228-2239.
    5. Di Cosmo, Valeria & Lynch, Muireann Á., 2016. "Competition and the single electricity market: Which lessons for Ireland?," Utilities Policy, Elsevier, vol. 41(C), pages 40-47.
    6. Stephen Davies, Catherine Waddams Price, and Chris M. Wilson, 2014. "Nonlinear Pricing and Tariff Differentiation: Evidence from the British Electricity Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    7. repec:eee:enepol:v:108:y:2017:i:c:p:467-473 is not listed on IDEAS
    8. repec:aen:journl:eeep4_1_valeri is not listed on IDEAS
    9. Yanrui Wu, 2012. "Electricity Market Integration Global Trends and Implications for the EAS Region," Economics Discussion / Working Papers 12-19, The University of Western Australia, Department of Economics.
    10. Gorecki, Paul K., 2011. "The Internal EU Electricity Market: Implications for Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS23.
    11. Daglish, Toby, 2016. "Consumer governance in electricity markets," Energy Economics, Elsevier, vol. 56(C), pages 326-337.
    12. Pollitt, M. J., 2011. "Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector," Cambridge Working Papers in Economics 1153, Faculty of Economics, University of Cambridge.
    13. repec:eee:enepol:v:118:y:2018:i:c:p:298-311 is not listed on IDEAS
    14. Pollitt, Michael G., 2012. "Lessons from the history of independent system operators in the energy sector," Energy Policy, Elsevier, vol. 47(C), pages 32-48.
    15. repec:pal:jorsoc:v:68:y:2017:i:10:d:10.1057_s41274-016-0149-4 is not listed on IDEAS
    16. Bosco, Bruno & Parisio, Lucia & Pelagatti, Matteo, 2013. "Price-capping in partially monopolistic electricity markets with an application to Italy," Energy Policy, Elsevier, vol. 54(C), pages 257-266.
    17. Seyed Safdar Hosseini & Zahra Alizadeh Khalifehmahaleh, 2013. "Market Structure and Price Adjustment in the Iranian Tea Market," Iranian Economic Review, Economics faculty of Tehran university, vol. 18(2), pages 1-19, spring.
    18. Boroumand, Raphaël Homayoun, 2015. "Electricity markets and oligopolistic behaviors: The impact of a multimarket structure," Research in International Business and Finance, Elsevier, vol. 33(C), pages 319-333.
    19. Daglish, Toby, 2015. "Consumer Governance in Electricity Markets," Working Paper Series 4183, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    20. Brown, David P. & Eckert, Andrew, 2017. "The Effect of Default Rates on Retail Competition and Pricing Decisions of Competitive Retailers: The Case of Alberta," Working Papers 2017-6, University of Alberta, Department of Economics.

    More about this item

    Keywords

    Electricity generation ; electricity supply ; retail pricing ; futures markets ; energy market competition;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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