Did English Generators Play Cournot? Capacity Withholding in the Electricity Pool
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Authors
Green, Richard J.
Publication Date
2004-06-16Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics
Language
en_GB
Type
Working Paper
Metadata
Show full item recordCitation
Green, R. J. (2004). Did English Generators Play Cournot? Capacity Withholding in the Electricity Pool. https://doi.org/10.17863/CAM.5389
Abstract
Electricity generators can raise the price of power by withholding their plant from the market. We discuss two ways in which this could have affected prices in the England and Wales Pool. Withholding low-cost capacity that should be generating will raise energy prices but make the pattern of generation less efficient. This pattern improved significantly after privatisation. Withholding capacity that was not expected to generate would raise the Capacity Payments based on spare capacity. On a multi-year basis, these did not usually exceed �competitive� levels, the cost of keeping stations open. The evidence for large-scale capacity withholding is weak.
Keywords
Classification-JEL: L94, Electricity prices, Cournot competition, capacity withholding
Identifiers
This record's DOI: https://doi.org/10.17863/CAM.5389
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