Citation

Discussion Paper Details

Please find the details for DP557 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Competition in the British Electricity Spot Market

Author(s): Richard Green and David M G Newbery

Publication Date: May 1991

Keyword(s): Bertrand Competition, Electricity Supply and Supply Functions

Programme Area(s): Applied Macroeconomics

Abstract: The British electricity supply industry has, with the exception of Nuclear Electric, now been privatized. Bulk supplies of electricity are traded between two dominant generators and many suppliers in an unregulated `pool'. The generators submit a supply schedule of prices for each generating set and receive the market clearing price, which varies with demand over time. It has been claimed that such Bertrand competition should be highly competitive, bit we show that the Nash equilibrium in supply schedules implies a high mark-up on marginal cost and very substantial deadweight losses.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=557

Bibliographic Reference

Green, R and Newbery, D. 1991. 'Competition in the British Electricity Spot Market'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=557