The electricity contract market in England and Wales

Article Abstract:

Electric utilities tend to hedge most of their output with forward contract sales in the spot market. This market behavior of electric utilities is evident in England and Wales, where wholesale electricity is sold in spot markets that are partly covered by long-term contracts. The two major electric power generators in England and Wales, National Power and PowerGen, can increase electricity spot prices that exceed marginal costs, which boosts their profits in the absence of contracts. These findings suggest that the electric power sector does not exist in a vacuum.

Regulation and Administration of Communications, Electric, Gas, and Other Utilities, Electric Power Generating, Electric Power Generation, Electric Utility Sales & Rates, Prices and rates, Contracts, Rate regulation

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An empirical analysis of the potential for market power in California's electricity industry

Article Abstract:

A study simulated Cournot market competition between major power suppliers in the California electricity market in 2001 to ascertain the probability of significant market power issues once the market is fully regulated. Findings indicate that policies which encourage the responsiveness of both power consumers and electricity producers to short-run price fluctuations can exert a significant impact on the minimization of the problems linked to market power.

Research, Case studies, Competition (Economics), California

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Increasing competition in the British electricity spot market

Article Abstract:

Three alternative methods of increasing competition in the electricity spot market in England and Wales are modeled, namely, partial divestiture negotiated by the regulator, breaking up the generators and encouraging more entry. A linear supply function model with asymmetric firms is employed. It was found that partial divestiture could result in a significant reduction in deadweight losses.

Economic aspects, Finance, Energy policy

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