Electricity Trade Patterns in a Network: Evidence from the Ontario Market

Talat Genc, Pierre-Olivier Pineau () and Ege Yazgan ()
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Pierre-Olivier Pineau: Management Sciences, HEC-Montreal

No 1102, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: We investigate whether trade has any effect on the price formation process in a specific electricity market, and identify interconnected markets that have higher impacts on prices in that market. In particular, we study Ontario wholesale electricity market and its trade with 12 interconnected markets including New York, Michigan, and Minnesota markets. We find that imports are unambiguously related to prices, while exports are not. Furthermore, imports have a positive and significant relationship with prices. We argue that the results are associated with auction design, production constraints, and technological differences. Out of the 12 studied interties, only three have a significant impact on price, two of which are the largest ones.

Keywords: electricity trade; simultaneous trade; transmission network; electricity prices; nonlinear Granger causality; Ontario, New York, Michigan, Manitoba, Quebec wholesale electricity markets. (search for similar items in EconPapers)
JEL-codes: C5 F14 L94 Q4 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011
New Economics Papers: this item is included in nep-ene, nep-int and nep-net
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