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Title The Scandinavian electricity power market and market power
Author Eggertsson, Haukur
Supervisor Madsen, Henrik (Department of Informatics and Mathematical Modeling, Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark)
Institution Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark
Thesis level Master's thesis
Year 2003
Abstract Recent high prices on the Scandinavian electric power market have led to public scrutiny of the market and have been the source of investigation of legal authorities. Although the Nord Pool spot market is considered to be one of the most successful electricity markets in the world, and one of few international electricity markets, the market is small in comparison to many other commodity markets, and is as such, together with the difficulty of storing electricity, less liquid and subject to more instability in prices and supply. In addition, due to limited transmission capacities between the areas that form the common markets, prices often vary between market areas. This can also give electricity generators a large market share in different areas, even though they only hold a modest market share on the total market. This thesis is a study of the possible uses of market power on the Nord Pool spot market and how this kind of market behavior, especially with regard to the game theory and Nash equilibria, can be detected. This is certainly not by any means an accusation against any member of the Nord Pool market, although the theoretical possibilities of some of them exercising market power, is discussed. My findings are that searching for Nash equilibria is not the most effective way of market power detection, due to the many uncertainties involved and the lack of information market power users as well as market power detectors will face.
Imprint Department of Informatics and Mathematical Modeling, Technical University of Denmark, DTU : DK-2800 Kgs. Lyngby, Denmark
Fulltext
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Admin Creation date: 2006-06-22    Update date: 2012-12-20    Source: dtu    ID: 58611    Original MXD