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The Elmar model: output and capacity in imperfectly competitive electricity markets

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  • Arie ten Cate
  • Mark Lijesen

Abstract

With the ongoing liberalization and integration of European energy markets and the increasing worries about security of supply, the need for thorough economic analysis of electricity markets is growing. Elmar is a model for the European electricity market, taking into account imperfect competition through conjectural variations, as well as imperfect international competition due to import capacity restrictions. The model distinguishes between competition on the output market and competition in capacity investments. We find that the least competitive of these determines wholesale prices.

Suggested Citation

  • Arie ten Cate & Mark Lijesen, 2004. "The Elmar model: output and capacity in imperfectly competitive electricity markets," CPB Memorandum 94, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:memodm:94
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    References listed on IDEAS

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    Cited by:

    1. Mulder, Machiel & Zeng, Yuyu, 2018. "Exploring interaction effects of climate policies: A model analysis of the power market," Resource and Energy Economics, Elsevier, vol. 54(C), pages 165-185.
    2. Arie ten Cate, 2009. "A closed-form expression for the optimal capacity of CHP," CPB Memorandum 220.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Johannes Bollen & Corjan Brink, 2012. "Air Pollution Policy in Europe: Quantifying the Interaction with Greenhouse Gases and Climate Change Policies," CPB Discussion Paper 220.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Arie ten Cate, 2009. "A closed-form expression for the optimal capacity of CHP," CPB Memorandum 220, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Machiel Mulder & Victoria Shestalova & Mark Lijesen, 2005. "Vertical separation of the energy-distribution industry; an assessment of several options for unbundling," CPB Document 84.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    6. ten Cate, Arie, 2009. "Solving models with inequalities using standard econometric software," Computational Statistics & Data Analysis, Elsevier, vol. 53(6), pages 2055-2060, April.
    7. Machiel Mulder & Victoria Shestalova & Mark Lijesen, 2005. "Vertical separation of the energy-distribution industry; an assessment of several options for unbundling," CPB Document 84, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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