IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v26y2005i1_supplp71-98.html
   My bibliography  Save this article

The Nordic Market: Signs of Stress?

Author

Listed:
  • Nils-Henrik M. von der Fehr
  • Eirik S. Amundsen
  • Lars Bergman

Abstract

The supply shock that hit the Nordic electricity market in 2002-2003 put the market to a severe test. A sharp reduction in inflow to hydro reservoirs during the normally wet months of late autumn pushed electricity prices to unprecedented levels. We take this event as the starting point for analysing some potential weaknesses of the Nordic market. We conclude that fears regarding supply security and adequacy are likely to be unfounded. Nevertheless, as inherited over-capacity is eroded, and new market-based environmental regulation takes effect, tighter market conditions are to be expected. It is then crucial that retail markets are fully developed so as to allow consumers to adequately protect themselves from occurrences of price spikes.

Suggested Citation

  • Nils-Henrik M. von der Fehr & Eirik S. Amundsen & Lars Bergman, 2005. "The Nordic Market: Signs of Stress?," The Energy Journal, , vol. 26(1_suppl), pages 71-98, June.
    • Handle: RePEc:sae:enejou:v:26:y:2005:i:1_suppl:p:71-98
    DOI: 10.5547/ISSN0195-6574-EJ-Vol26-NoSI-4
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol26-NoSI-4
    Download Restriction: no
    File URL: https://libkey.io/10.5547/ISSN0195-6574-EJ-Vol26-NoSI-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hauch, Jens, 2003. "Electricity trade and CO2 emission reductions in the Nordic countries," Energy Economics, Elsevier, vol. 25(5), pages 509-526, September.
    2. Hindsberger, Magnus & Nybroe, Malene Hein & Ravn, Hans F. & Schmidt, Rune, 2003. "Co-existence of electricity, TEP, and TGC markets in the Baltic Sea Region," Energy Policy, Elsevier, vol. 31(1), pages 85-96, January.
    3. Amundsen, Eirik S. & Nesse, Arvid & Tjotta, Sigve, 1999. "Deregulation of the Nordic power market and environmental policy," Energy Economics, Elsevier, vol. 21(5), pages 417-434, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Orvika Rosnes, 2014. "Subsidies for renewable energy in inflexible power markets," Journal of Regulatory Economics, Springer, vol. 46(3), pages 318-343, December.
    2. Amundsen, Eirik Schrøder & Nese, Gjermund, 2005. "Integrated Tradable Green Certificate Markets: Functioning and Compatibility," Working Papers in Economics 03/05, University of Bergen, Department of Economics.
    3. Yang, Yuting, 2022. "Electricity interconnection with intermittent renewables," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    4. Delarue, Erik & Van den Bergh, Kenneth, 2016. "Carbon mitigation in the electric power sector under cap-and-trade and renewables policies," Energy Policy, Elsevier, vol. 92(C), pages 34-44.
    5. Würzburg, Klaas & Labandeira, Xavier & Linares, Pedro, 2013. "Renewable generation and electricity prices: Taking stock and new evidence for Germany and Austria," Energy Economics, Elsevier, vol. 40(S1), pages 159-171.
    6. Bode, Sven, 2006. "Multi-period emissions trading in the electricity sector--winners and losers," Energy Policy, Elsevier, vol. 34(6), pages 680-691, April.
    7. Gesine Bökenkamp & Wan-Jung Chou & Olav Hohmeyer & Wouter Nijs & Alistair Hunt & Anil Markandya, 2010. "Policy Instruments," Chapters, in: Anil Markandya & Andrea Bigano & Roberto Porchia (ed.), The Social Cost of Electricity, chapter 6, Edward Elgar Publishing.
    8. Ochoa, Camila & Dyner, Isaac & Franco, Carlos J., 2013. "Simulating power integration in Latin America to assess challenges, opportunities, and threats," Energy Policy, Elsevier, vol. 61(C), pages 267-273.
    9. Kemppi, Heikki & Perrels, Adriaan, 2003. "Liberalised Electricity Markets - Strengths and Weaknesses in Finland and Nordpool," Research Reports 97, VATT Institute for Economic Research.
    10. Rong, Aiying & Lahdelma, Risto, 2007. "CO2 emissions trading planning in combined heat and power production via multi-period stochastic optimization," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1874-1895, February.
    11. Van den Bergh, Kenneth & Delarue, Erik & D'haeseleer, William, 2013. "Impact of renewables deployment on the CO2 price and the CO2 emissions in the European electricity sector," Energy Policy, Elsevier, vol. 63(C), pages 1021-1031.
    12. Catton, Will & Carrington, Gerry & Sun, Zhifa, 2011. "Exergy analysis of an isothermal heat pump dryer," Energy, Elsevier, vol. 36(8), pages 4616-4624.
    13. Sáenz de Miera, Gonzalo & del Ri­o González, Pablo & Vizcaino, Ignacio, 2008. "Analysing the impact of renewable electricity support schemes on power prices: The case of wind electricity in Spain," Energy Policy, Elsevier, vol. 36(9), pages 3345-3359, September.
    14. Lata Gangadharan & Rachel Croson & Alex Farrell, 2013. "Investment decisions and emissions reductions: results from experiments in emissions trading," Chapters, in: John A. List & Michael K. Price (ed.), Handbook on Experimental Economics and the Environment, chapter 8, pages 233-264, Edward Elgar Publishing.
    15. Amundsen, Eirik Schrøder & Bergman, Lars, 2010. "Green Certificates and Market Power on the Nordic Power Market," Working Papers in Economics 12/10, University of Bergen, Department of Economics.
    16. Bunn, Derek W. & Fezzi, Carlo, 2007. "Interaction of European Carbon Trading and Energy Prices," Climate Change Modelling and Policy Working Papers 9092, Fondazione Eni Enrico Mattei (FEEM).
    17. Lopez, Neil Stephen A. & Foo, Dominic C.Y. & Tan, Raymond R., 2021. "Optimizing regional electricity trading with Carbon Emissions Pinch Analysis," Energy, Elsevier, vol. 237(C).
    18. Weigt, Hannes & Ellerman, Denny & Delarue, Erik, 2013. "CO2 abatement from renewables in the German electricity sector: Does a CO2 price help?," Energy Economics, Elsevier, vol. 40(S1), pages 149-158.
    19. Lehmann, Paul & Gawel, Erik, 2013. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," Energy Policy, Elsevier, vol. 52(C), pages 597-607.
    20. Rathmann, M., 2007. "Do support systems for RES-E reduce EU-ETS-driven electricity prices?," Energy Policy, Elsevier, vol. 35(1), pages 342-349, January.

    More about this item

    Keywords

    Nordic electricity market; Nord Pool; electricity supply; market power; electricity prices;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:26:y:2005:i:1_suppl:p:71-98. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.