MARKET POWER AND INTEGRATED REGIONAL MARKETS OF ELECTRICITY: A SIMULATION OF THE MIBEL
MARTA FERREIRA DIAS, SILVIA F. JORGE
Abstract:
We consider a partial equilibrium model where we study the integration of two oligopolistic markets that are not symmetric (in number of firms, in demand or market dimension). We present a simulation for the integration of the Iberian wholesale electricity market (MIBEL) and show how the exercise of market power will evolve with regional full integration. The simulation results show that, as expected, market power is lower after full integration. However, even after full integration, market power is still a feature of the market. There fore, the full benefits of liberalisation and integration are not seized by the consumers since wholesale prices persist to be higher than marginal costs.
Keywords:
MIBEL, Market Power, Cournot Simulation Model
DOI: 10.52950/ES.2017.6.2.003
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APA citation:
MARTA FERREIRA DIAS, SILVIA F. JORGE (2017). Market power and integrated regional markets of electricity: a simulation of the MIBEL. International Journal of Economic Sciences, Vol. VI(2), pp. 45-67. , DOI: 10.52950/ES.2017.6.2.003
Data:
Received: 3 Sep 2017
Revised: 17 Oct 2017
Accepted: 6 Nov 2017
Published: 20 Nov 2017
Copyright © 2017, Marta Ferreira Dias et al, mfdias@ua.pt