Electricity prices in a mixed thermal and hydropower system

Arbeitspapier

When a monopolistic hydro producer interacts with a competitive thermal fringe, the short-run revenue function of the hydro monopolist is non-concave. This implies that even if the demand function is stationary, equilibrium prices may fluctuate through the year. For given capacities, both hydro and thermal producers are better off under such an outcome than under the competitive outcome with constant prices, while consumers are worse off. Prices may fluctuate through the year also in the long-run equilibrium where capacities are endogenous. In such an equilibrium the hydropower monopoly will get a lower profit than it would have gotten had it been a price taker.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Memorandum ; No. 2004,28

Classification and Topics

• Classification: Wirtschaft ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets ; Electric Utilities ; Renewable Resources and Conservation: Water
• Subject: Electricity prices ; Hydropower ; Stromtarif ; Wasserkraft ; Wärmeenergie ; Unvollkommener Markt ; Monopol ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hoel, Michael
• Event: Veröffentlichung
• (who): University of Oslo, Department of Economics
• (where): Oslo
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/62963
• Last update: 10.03.2025, 11:41 AM CET