Market power and integrated regional markets of electricity: a simulation of the MIBEL

Marta Ferreira Dias () and Silvia F. Jorge ()
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Silvia F. Jorge: GOVCOPP, DEGEIT, University of Aveiro

International Journal of Economic Sciences, 2017, vol. 6, issue 2, 45-67

Abstract: We consider a partial equilibrium model where we study the integration of two oligopolistic markets that are not symmetric (in number of ?rms, in demand or market dimension). We present a simulation for the integration of the Iberian wholesale electricity market (MIBEL) and show how the exercise of market power will evolve with regional full integration. The simulation results show that, as expected, market power is lower after full integration. However, even after full integration, market power is still a feature of the market. There fore, the full bene?ts of liberalisation and integration are not seized by the consumers since wholesale prices persist to be higher than marginal costs.

Keywords: MIBEL; Market Power; Cournot Simulation Model (search for similar items in EconPapers)
JEL-codes: L11 L49 L94 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sek:jijoes:v:6:y:2017:i:2:p:45-67

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