Will California come to Europe? A Numerical Simulation

Authors: Lijesen M.¹; Mannaerts H.²; Mulder M.²

Source: Journal of Industry, Competition and Trade, Volume 2, Numbers 1-2, June 2002 , pp. 173-188(16)

Publisher: Springer

Buy & download fulltext article:

Price: $47.00 plus tax (Refund Policy)

Abstract:

We discuss under what conditions California’s electricity crisis may happen in Western European countries, taking The Netherlands as an example. We use a simulation model containing the electricity generation and distribution sector. We simulate exogenous events, such as a sudden shift in demand levels, a sharp rise in world fuel prices and a cutback in foreign supply. We use the model to investigate whether supply remains secured under different regulatory regimes. Our results suggest a trade-off between controlled prices and security of supply. Europe’s electricity supply security is vulnerable if prices are not allowed to reflect scarcity. If prices are unrestricted however, they will reach oligopoly levels.

Keywords: electricity; liberalization; service reliability

Language: English

Document Type: Research article

Affiliations: 1: CPB, Netherlands Bureau for Economic Policy Research, Department of energy and raw materials mgl@cpb.nl 2: CPB, Netherlands Bureau for Economic Policy Research, Department of energy and raw materials

Publication date: 2002-06-01