Market power in the expanding Nordic power market
Abstract:We examine if the Nordic power market, Nord Pool, has been competitive or if electricity suppliers have had market power. Specifically, since the evolution from national markets to a multi-national and largely deregulated power market has taken place stepwise, we also examine how the degree of market power has evolved during this integration process. The Bresnahan-Lau method together with weekly data during 1996-2004 are used in the analysis, which shows that electricity suppliers have had small, but statistically significant, market power, but that the market power has been reduced as the Nord Pool area has expanded.
Document Type: Research Article
Affiliations: 1: Department of Finance and Statistics, Swedish School of Economics and Business Administration, FIN-00101 Helsinki, Finland 2: Department of Economics, Umeå University, SE-901 87 Umeå, Sweden 3: Department of Economics, Dalarna University, SE-781 88 Borlange, Sweden,The Swedish Retail Institute (HUI), SE-103 29 Stockholm, Sweden
Publication date: April 1, 2011