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ID: 090104

Market power in the Nordic electricity wholesale market: a survey of the empirical evidence / Fridolfsson, Sven-Olof; Tangeras, Thomas P

Fridolfsson, Sven-Olof	Journal Article
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Publication

2009.

Summary/Abstract

We review the recent empirical research assessing market power on the Nordic wholesale market for electricity, Nord Pool. The studies find no evidence of systematic exploitation of system level market power on Nord Pool. Local market power arising from transmission constraints seems to be more problematic in some price areas across the Nordic countries. Market power can manifest itself in a number of ways that have so far escaped empirical scrutiny. We discuss investment incentives, vertical integration and buyer power, as well as withholding of base-load (nuclear) capacity.

Key Words

Energy ; Market Power ; Hydro Power ; Transmission Constraints

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ID: 122715

Reexamination of renewable electricity policy in Sweden / Fridolfsson, Sven-Olof; Tangeras, Thomas P

Fridolfsson, Sven-Olof	Journal Article
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Publication

2013.

Summary/Abstract

Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem.

Key Words

NIMBY ; Crowding Out ; Green Certificates

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