Market Power in the German Wholesale Electricity Market

Arbeitspapier

This paper quantifies the degree of market power in the German wholesale electricity market. A fundamental model is used to derive competitive marginal cost estimators which are compared with observed electricity prices. Marginal costs are calculated focusing on market fundamentals such as plant capacities, fuel prices, and load structures. In addition, international power exchange and dynamic effects like start-up costs and hydro storage plant dispatch are incorporated. The comparison of marginal costs and prices reveals significant market power in the German electricity market, mainly exhibited during peak periods. Producer surplus is significantly increased by market power.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EWI Working Paper ; No. 04.03

Classification and Topics

• Classification: Wirtschaft ; Optimization Techniques; Programming Models; Dynamic Analysis ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Oligopoly and Other Imperfect Markets ; Electric Utilities
• Subject: Market Power ; Electricity Markets ; Energy Modelling ; Elektrizitätswirtschaft ; Grosshandel ; Marktmacht ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Müsgens, Felix
• Event: Veröffentlichung
• (who): Institute of Energy Economics at the University of Cologne (EWI)
• (where): Köln
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/23154
• Last update: 10.03.2025, 11:44 AM CET