Seeking the Single European Electricity Market: Evidence from an Empirical Analysis of Wholesale Market Prices

摘要: The objectives of this paper are to assess the progress made towards a single European wholesale electricity market by end 2001, and identify remaining sources economic inefficiency. Statistical analysis day-ahead prices, in fifteen locations, show Nord Pool (Scandinavia), German, markets were almost perfectly competitive, but frequent price spikes, reversion equilibrium levels above marginal generation costs, occurred elsewhere. Daily changes well correlated between not others. Cointegration shows prices integrated all except Spain. Results consistent with arbitrage trading existence market. However, is inefficient because generating firms exercised power at some mechanisms allocate capacity on congested transmission lines weak. Commission should increase competition breaking up dominant firms, subsidising construction.