Market power analysis in the Iberian electricity market using a conjectural variations model

João Lagarto, Jorge A.M. Sousa, Álvaro Martins and Paulo Ferrão

Energy, 2014, vol. 76, issue C, 292-305

Abstract: In the last years the electricity industry has faced a restructuring process. Among the aims of this process was the increase in competition, especially in the generation activity where firms would have an incentive to become more efficient. However, the competitive behavior of generating firms might jeopardize the expected benefits of the electricity industry liberalization. The present paper proposes a conjectural variations model to study the competitive behavior of generating firms acting in liberalized electricity markets. The model computes a parameter that represents the degree of competition of each generating firm in each trading period. In this regard, the proposed model provides a powerful methodology for regulatory and competition authorities to monitor the competitive behavior of generating firms.

Keywords: Market power; Conjectural variations model; Iberian electricity market (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:76:y:2014:i:c:p:292-305

DOI: 10.1016/j.energy.2014.08.014

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