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Mergers in the GB electricity market: effects on retail charges

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  • Evens Salies

Abstract

The opening up of the UK residential electricity sector in 1999 prompted several studies of the impact this had on both the level and structuring of retail charges, and on incumbent players' market power. Drawing on observations of regional tariffs for the month of January 2004, this article supports previous conclusions based on simulated retail charges, looking at the response of real tariffs to distribution and transmission costs, customer density and the length of low voltage underground circuit. We also investigate whether vertically integrated suppliers have a particular effect on charges ceteris paribus the effect of cost drivers and supplier-related factors.

Suggested Citation

  • Evens Salies, 2008. "Mergers in the GB electricity market: effects on retail charges," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1483-1490.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:11:p:1483-1490
    DOI: 10.1080/00036840600794322
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    References listed on IDEAS

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    1. Evens Salies and Catherine Waddams Price, 2004. "Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 19-36.
    2. Spector, David, 2003. "Horizontal mergers, entry, and efficiency defences," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1591-1600, December.
    3. Waterson, Michael, 2003. "Consumers and Competition," Economic Research Papers 269563, University of Warwick - Department of Economics.
    4. Waterson, Michael, 2003. "The role of consumers in competition and competition policy," International Journal of Industrial Organization, Elsevier, vol. 21(2), pages 129-150, February.
    5. Evens Salies & Catherine Waddams, 2003. "Pricing structure in the deregulated UK electricity market," SciencePo Working papers Main hal-03592457, HAL.
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    7. Otero, Jesus & Waddams Price, Catherine, 2001. "Price Discrimination, Regulation and Entry in the UK Residential Electricity Market," Bulletin of Economic Research, Wiley Blackwell, vol. 53(3), pages 161-175, July.
    8. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 31, pages 1967-2072, Elsevier.
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    12. Azzeddine Azzam & David Rosenbaum, 2001. "Differential efficiency, market structure and price," Applied Economics, Taylor & Francis Journals, vol. 33(10), pages 1351-1357.
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    Cited by:

    1. Zhou, Huizhong & Tamas, Meszaros Matyas, 2010. "Impacts of integration of production of black and green energy," Energy Economics, Elsevier, vol. 32(1), pages 220-226, January.
    2. Amountzias, Chrysovalantis & Dagdeviren, Hulya & Patokos, Tassos, 2017. "Pricing decisions and market power in the UK electricity market: A VECM approach," Energy Policy, Elsevier, vol. 108(C), pages 467-473.
    3. Evens Salies, 2010. "A Test of the Schumpeterian Hypothesis in a Panel of European Electric Utilities," Chapters, in: Jean-Luc Gaffard & Evens Salies (ed.), Innovation, Economic Growth and the Firm, chapter 6, Edward Elgar Publishing.
    4. H. Schmale & T. Ehrmann & A. Dilger, 2013. "Buying without using -- biases of German BahnCard buyers," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 933-941, March.
    5. Nikogosian, Vigen & Veith, Tobias, 2012. "The impact of ownership on price-setting in retail-energy markets—The German case," Energy Policy, Elsevier, vol. 41(C), pages 161-172.
    6. Nikogosian, Vigen & Veith, Tobias, 2010. "Der Einfluss öffentlichen Eigentums auf die Preissetzung in deutschen Haushaltsstrommärkten," ZEW Discussion Papers 10-090, ZEW - Leibniz Centre for European Economic Research.
    7. Nikogosian, Vigen & Veith, Tobias, 2011. "Strategic pricing, market entry and competition: Evidence from German electricity submarkets," ZEW Discussion Papers 11-068, ZEW - Leibniz Centre for European Economic Research.
    8. Nikogosian, Vigen & Veith, Tobias, 2011. "Vertical integration, separation and non-price discrimination: An empirical analysis of German electricity markets for residential customers," ZEW Discussion Papers 11-069, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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