Being in Balance: Economic Efficiency in the Dutch Power Market

C. Huurman and Ronald Huisman

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: In this paper, we examine economic efficiency in the Dutch power market, an important pillar for successful creation of a competitive and non-discriminatory free power market. We examine historical time series of prices and volumes on the Dutch balancing market where energy companies are obliged to offer reserve capacity in order to offset power surpluses and deficits on the grid. We argue that these balancing prices and volumes are indicators for the level of economic efficiency. We find evidence that the level of economic efficiency has increased in the Dutch power market while the level of security of supply has maintained.

Keywords: balancing power market; balancing prices; balancing volumes dynamics; deregulated energy markets; economic efficiency; indicators (search for similar items in EconPapers)
JEL-codes: G3 M Q43 (search for similar items in EconPapers)
Date: 2004-08-13
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