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Competition and Merit Order Effect in the Colombian Electricity Market

Author

Listed:
  • Alex Perez

    (Centro de Estudios sobre Producci n y Comercio Sectorial, Banco de la Rep blica de Colombia, Colombia)

  • Jaime Carabali

    (Data Analyst, Banco W, Cali, Colombia,)

  • Julian Benavides-Franco

    (Chair of Department of Accounting and Finance Studies, Universidad ICESI, Cali, Colombia.)

Abstract

In this paper, we study the relationship between the merit order effect and the ownership structure of renewable resources in electricity markets. We use daily frequency data from the Colombian electricity market in 2012-2019 and designed a strategy to estimate the spot price s dependence on renewable energy. We study how the participation of multi-technology firms in renewable energy alters the spot price. Our main results show a merit order effect for the Colombian electricity market, but this weakens in the presence of greater participation of multi-technology firms in the total availability of renewable energy for the day.

Suggested Citation

  • Alex Perez & Jaime Carabali & Julian Benavides-Franco, 2022. "Competition and Merit Order Effect in the Colombian Electricity Market," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 144-155.
    • Handle: RePEc:eco:journ2:2022-01-18
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    References listed on IDEAS

    as
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    Cited by:

    1. David Rios & Alex Perez & Jaime Carabali & Luis Meneses, 2024. "Poder de mercado y eventos climáticos adversos en un mercado de electricidad hidro-dominado," Borradores de Economia 1266, Banco de la Republica de Colombia.

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    More about this item

    Keywords

    Merit Order Effect; Renewable Energy; Electricity Spot Markets; Imperfect Competition;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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