Market Power in the Spanish Electricity Auction

Aitor Ciarreta Antuñano () and Maria Paz Espinosa ()

DFAEII Working Papers from University of the Basque Country - Department of Foundations of Economic Analysis II

Abstract: We use hourly bid data from the Spanish day-ahead electricity auction to obtain a lower bound measure of generators' market power. Our method is not based on cost estimates but rather on the different behavior of strategic generators as compared to the behavior of more competitive producers. The results indicate that, despite the price cap effect of regulation in this market, the larger operators in the day-ahead market are able to increase prices above the competitive benchmark by a significant amount.

Keywords: market power; electricity market (search for similar items in EconPapers)
JEL-codes: L11 L13 L51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene and nep-mic
Date: 2005-02-11
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Persistent link: http://EconPapers.repec.org/RePEc:ehu:dfaeii:200504

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Dpto. de Fundamentos del Análisis Económico II, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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