Inflow Uncertainty in Hydropower Markets

Arbeitspapier

In order to analyse the consequences of uncertainty for prices and efficiency in a hydropower system, we apply a two-period model with uncertainty in water inflow. We study three different market structures, perfect competition, monopoly and oligopoly and stress the importance of the shape of the demand function under different distributions of water inflow. The uncertainty element creates possibilities of exercising market power depending on the distribution of uncertainty among producers. The introduction of thermal power into the hydropower market has an impact on the residual demand function, which is important for the hydropower producers' possibilities of exercising market power.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 520

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Agriculture: Aggregate Supply and Demand Analysis; Prices ; Energy: Demand and Supply; Prices ; Market Structure, Firm Strategy, and Market Performance: General
• Subject: hydropower ; uncertainty ; electricity ; thermal power ; demand functions ; monopoly ; duopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hansen, Petter Vegard
• Event: Veröffentlichung
• (who): Statistics Norway, Research Department
• (where): Oslo
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/192502
• Last update: 10.03.2025, 11:43 AM CET