Simulation of current pricing-tendencies in the German electricity market for private consumption

Moritz Müller (), Frank Sensfuß and Martin Wietschel
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Moritz Müller: BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique
Frank Sensfuß: Fraunhofer ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer-Gesellschaft - Fraunhofer
Martin Wietschel: Fraunhofer ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer-Gesellschaft - Fraunhofer

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Abstract: The German electricity market for private consumption is characterized by increasing prices and low participation of the consumers. This prompts us to investigate the interdependencies between the customers' engagement in the market and the suppliers' pricing strategies. Based on an analysis of the German retail market, an agent-based simulation model is developed. Whereas the behaviour of private customers is calibrated on field data, the suppliers learn to maximize profits with a feedback-learning heuristic. The simulation results show a tendency of rising prices, which are created without the assumption of tacit collusion among suppliers. We conclude that in Germany the current market pressure of private customers may not be a sufficient incentive for suppliers to lower electricity prices.

Keywords: Agent-based simulation; Electricity market; Liberalization (search for similar items in EconPapers)
Date: 2007-08
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Published in Energy Policy, 2007, 35 (8), pp.4283-4294. ⟨10.1016/j.enpol.2007.02.032⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00278957

DOI: 10.1016/j.enpol.2007.02.032

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