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Cyclic behavior in dynamic investment decisions for deregulated energy markets

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  • Marek Kočan

Abstract

In the first years after the deregulation of the electricity industry, investment into new generation capacity has not taken place on a large scale in any central european country. Recent increases in prices indicate that investment could be very profitable. However, the fear is that the need for new capacity can be overestimated and that could lead to a decrease in prices and profits and consequently to a reduction/stop of new investments. The aim of this paper is to model and analyze factors that influence the stability of electricity prices. The electricity market is modeled using a Cournot game and the stability of electricity prices is analyzed by simulations. Copyright Springer-Verlag 2008

Suggested Citation

  • Marek Kočan, 2008. "Cyclic behavior in dynamic investment decisions for deregulated energy markets," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 16(1), pages 67-78, March.
    • Handle: RePEc:spr:cejnor:v:16:y:2008:i:1:p:67-78
    DOI: 10.1007/s10100-007-0043-x
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    References listed on IDEAS

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    Cited by:

    1. Arango, Santiago & Larsen, Erik, 2011. "Cycles in deregulated electricity markets: Empirical evidence from two decades," Energy Policy, Elsevier, vol. 39(5), pages 2457-2466, May.

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