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COVID-19 lockdown and market power in the Italian electricity market

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  • Bigerna, Simona
  • Bollino, Carlo Andrea
  • D'Errico, Maria Chiara
  • Polinori, Paolo

Abstract

The Italian electricity market was characterized by a remarkable decrease in demand during the COVID-19 lockdown (10 March to 2 June 2020). There were also negative peaks of over 50% and record low prices of about 20 Euro/MW. This paper aims to investigate the exercise of market power in the Italian power exchange during the pandemic, explicitly considering transmission line congestion, and disentangling the measure of the unilateral market power from congestion rent and re-dispatching costs.

Suggested Citation

  • Bigerna, Simona & Bollino, Carlo Andrea & D'Errico, Maria Chiara & Polinori, Paolo, 2022. "COVID-19 lockdown and market power in the Italian electricity market," Energy Policy, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:enepol:v:161:y:2022:i:c:s0301421521005656
    DOI: 10.1016/j.enpol.2021.112700
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    More about this item

    Keywords

    Electricity market; COVID-19 pandemic lockdown; Market power; Zonal lerner index; Mark-up; Mark-down;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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