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WP n. 17 - MIncreasing Market Interconnection: an analysis of the Italian Electricity Spot Market

Author

Listed:
  • Federico Boffa
  • Viswanath Pingali

    (School of Economics and Management, Free University of Bolzano, Cornerstone Research-Boston)

Abstract

We estimate the bene ts resulting from completely interconnecting the Italian electricity spot market. The market is currently divided into two geographic zones - North and South - with limited interzonal transmission capacity that often induces congestion, and hence potential inefficiency. By simulating a fully interconnected market for May 2004, we predict that the total spot market expenditure reduces substantially by almost four percent. Our analysis finds evidence that the (partly State owned) major firm in the market does not currently maximize its short-term profit, and would benefit as well from improved interconnection.

Suggested Citation

  • Federico Boffa & Viswanath Pingali, 2008. "WP n. 17 - MIncreasing Market Interconnection: an analysis of the Italian Electricity Spot Market," Working Papers wpaper17, Macerata University, Department of Studies on Economic Development (DiSSE), revised Jul 2008.
    • Handle: RePEc:mcr:wpaper:wpaper17
    as

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    File URL: http://www.unimc.it/sviluppoeconomico/wpaper/wpaper17/filePaper
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    More about this item

    Keywords

    Transmission constraints; self-regulated monopoly; zonal pricing; congestion;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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