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Market Power in the Nordic Electricity Wholesale Market: A Survey of the Empirical Evidence

Energy Policy, Vol. 37,No. 9, pp. 3681-3692, September 2009

IFN Working No. 773

32 Pages Posted: 17 Sep 2010 Last revised: 30 Jan 2011

Sven-Olof Fridolfsson

Research Institute of Industrial Economics (IFN)

Thomas Tangerås

Research Institute of Industrial Economics (IFN)

Date Written: November 28, 2008

Abstract

We review the recent empirical research concerning market power on the Nordic wholesale market for electricity, Nord Pool. There is no evidence of blatant and systematic exploitation of system level market power on Nord Pool. However, generation companies seem from time to time able to take advantage of capacity constraints in transmission to wield regional market power. Market power can manifest itself in a number of ways which have so far escaped empirical scrutiny. We discuss investment incentives, vertical integration and buyer power, as well as withholding of base-load (nuclear) capacity.

Keywords: electricity markets, deregulation, market power, hydro power, transmission constraints

JEL Classification: L13, L94, Q41

Suggested Citation

Fridolfsson, Sven-Olof and Tangerås, Thomas, Market Power in the Nordic Electricity Wholesale Market: A Survey of the Empirical Evidence (November 28, 2008). Energy Policy, Vol. 37,No. 9, pp. 3681-3692, September 2009; IFN Working No. 773. Available at SSRN: https://ssrn.com/abstract=1308493 or http://dx.doi.org/10.2139/ssrn.1308493

Sven-Olof Fridolfsson

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Thomas Tangerås (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/thomast

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