The Effect of UI Regulation on the Electricity Market

Kaushal Kishore

Journal of Infrastructure Development, 2011, vol. 3, issue 1, 91-96

Abstract: We studied a scenario where two electricity generators compete with each other in the presence of forward market. We find that if generators are restricted to sell a fraction less than half of their total supply in the spot market, then the price of electricity falls and supply increases. Generators have to sell more in the forward market to sell electricity in the spot market; hence, they have less incentive to restrict the supply in the forward market to sell electricity at higher price in the spot market.

Keywords: JEL Classification: L100 – Market Structure; JEL Classification: Firm Strategy; JEL Classification: Market Performance: General; L190 – Market Structure; Firm Strategy; JEL Classification: Market Performance: Other; L130 – Oligopoly and Other Imperfect Markets; Regulation; Nash equilibrium; power purchasing agreement; spot market; forward market (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jouinf:v:3:y:2011:i:1:p:91-96

DOI: 10.1177/097493061100300104

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