Integrating Energy Markets: Does Sequencing Matter?
Cambridge Working Papers in Economics
CMI Working Paper
Faculty of Economics
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Neuhoff, K., & Newbery, D. (2004). Integrating Energy Markets: Does Sequencing Matter?. https://doi.org/10.17863/CAM.5190
This paper addresses three questions that are relevant to integrating different regional transmission areas. Market integrating normally increases the number of competitors and should therefore reduce prices but the first section shows that prices could rise when the number of generators initially increases. Regulatory effort will also be affected by market integration. If the number of generators in either market is low, then our analysis suggests that the outcome depends on whether the regulators act independently or co-ordinate. Finally, if markets are gradually combined into larger units, the choice of transmission allocation (auctions or market coupling) will affect the prospects of making further gains and hence could lead to incomplete reform.
Wholesale electricity markets, Market evolution, networks, market monitoring
CWPE0442, CMI Working Paper 48
This record's DOI: https://doi.org/10.17863/CAM.5190
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