Transmission capacities and competition in Western European electricity market

Olga Spiridonova

Energy Policy, 2016, vol. 96, issue C, 260-273

Abstract: The integration of national electricity markets into a single European one is expected to reduce the ability of dominant players to exercise market power. This paper investigates whether or not existing transmission capacities of cross-border interconnectors are sufficient to achieve this result and create vigorous competition in the market. A model with two decision levels is used. On the first level profit maximizing generators play Cournot game against each other. On the last level the system operator clears the market and determines flows in the network to maximize social welfare subject to a set of physical constraints. As each strategic generator anticipates her impact on equilibrium prices and congestion in the system, her optimization problem is subject to equilibrium constraints from the system operator's problem.

Keywords: Electric power market; Stackelberg game; Electricity transmission; Market power; Network expansion (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:96:y:2016:i:c:p:260-273

DOI: 10.1016/j.enpol.2016.06.005

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