The Electricity Contract Market

Richard Green

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: In England and Wales, wholesale electricity is sold in a spot market partly covered by long-term contracts which hedge the spot price. Two dominant conventional generators can raise spot prices to undesirable levels, which is profitable in the absence of contracts. If fully hedged, however, the generators lose their incentive to raise prices above marginal costs. Competition in the contract market could lead the generators to sell contracts for much of their output. Since privatisation, the generators have indeed covered most of their sales in the contract market.

Keywords: OLIGOPOLIES; ELECTRICITY; CONTRACTS (search for similar items in EconPapers)
JEL-codes: L10 L13 L90 L94 (search for similar items in EconPapers)
Pages: 22 pages
Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (15)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:9616

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().