Sage Journals: Discover world-class research

Abstract

In this paper we analyze deregulation and integration of the Nordic markets for electric power. Nordic trade in electricity is controlled by national monopolies and is confined to occasional power. No transit is allowed. Due to its central location, Sweden plays a crucial role in the Nordic electricity market. For Sweden, common carriage without some form of compensation is not likely to be an acceptable form of integration. The Shapley values reveal that compensatory demands are likely to be quite large—a fact which might complicate negotiations on the introduction of common carriage. An alternative to common carriage would be for Sweden to exert market power through monopolistic pricing of its transmission services. Government involvement may be necessary to secure a successful integration of international electricity markets.

Keywords

Nordic electricity market Common carriage deregulation

Get full access to this article

View all access options for this article.

References

Berger

Haurie

Loulou

(1991). “Electricity Trading in the American-Canadian Northeast: A Game Theoretical Analysis,” paper presented at the 32nd International Conference of Applied Econometrics Association, October 1991, Montpellier, France.

Bjorvatn

Tjøtta

(1992). “Deregulation and Common Carriage in the Nordic Power System,” SNF-Working Paper no. 104/1992, Foundation for Research in Economics and Business Administration (SNF), Bergen, Norway.

Carey

(1977). “Integrability and Mathematical Programming Models: A Survey and Parametric Approach,” Econometrica 45: 1957-76.

Commission of the European Communities (1988). The Internal Energy Market, Com(88) 238 final, Brussels, Belgium.

Dargay

(1983). “The Demand for Energy in Swedish Manufacturing”, in Ysander, B-C. (1983).

Friedman

James

(1986). Game Theory with Applications to Economics. Oxford: Oxford University Press.

IEA (1991). Energy Prices and Taxes, Fourth Quarter, 1991, Paris.

IEA (1990). Energy Statistics of OECD countries 1987-1988, Paris.

Harker

P.T.

Pang

J.S.

(1990). “Finite-dimensional Variational Inequality and Nonlinear Complementarity Problems: A Survey of Theory, Algorithms and Applications,” Mathematical Programming 48: 162-220.

10.

Hjalmarsson

Veiderpass

(1988). The Swedish Electricity Market; A Survey of Market Behaviour and Mode of Functioning, The Department of Economics, University of Gothenburg, Sweden.

11.

Joskow

P.L.

Schmalensee

(1983). Markets for Power - An Analysis of Electrical Utility Deregulation. Cambridge, Mass.: MIT Press.

12.

Lau

L.J.

(1984). “Comments,” in Scharf and Shoven (1984).

13.

Lensberg

Rasmussen

(1986). “World Market Prospects. COMPAK - User Manual,” Centre for Applied Research, Norwegian School of Economics and Business Administration, Bergen, Norway.

14.

Mansur and Whalley (1984). “Numerical Specification of Applied General Equilibrium Models: Estimation, Calculation, and Data,” in Scharf and Shoven (1984).

15.

Mathiesen

Lars

(1985a). “Computation of Economic Equilibria by a Sequence of Linear Complementarity Problems,” Mathematical Programming Study 23: 144-62.

16.

Mathiesen

Lars

(1985b). “Computational Experience on Solving Equilibrium Models by a Sequence of Linear Complementarity Problems”, Operations Research 33(6): 1225-50.

17.

Nordel (1988). Annual Report, Oslo, Norway.

18.

Samuelson

P.A.

(1947). Foundations of Economic Analysis. Cambridge, Mass.: Harvard University Press.

19.

Scharf

Shoven

J.B.

(1984). Applied General Equilibrium Analysis. Cambridge, U.K.: Cambridge University Press.

20.

Takayama and Judge (1971). Spatial and Temporal Price and Allocation Models. Amsterdam: North Holland.

21.

Tandberg

(1992). “Introduction of Natural Gas in the Scandinavian Energy Market,” SNF-Working Paper no. 53/1992, Foundation for Research in Economics and Business Administration (SNF), Bergen, Norway.

22.

Vaage

(1990). “Dynamic Modelling of the Demand for Electricity; Model Choice and Empirical Evidence from Norwegian Household Consumption,” SAF Working Paper no. 103/1990, Centre for Applied Research, Norwegian School of Economics and Business Administration, Bergen, Norway.

23.

Vickers

Yarrow

(1991). “The British Electricity Experiment,” Economic Policy 12: 187-232.

24.

Wiedswang

Rolf

(1989). “Gasskraft i Norden,” Lecture in Norwegian held in Oslo.

25.

Ysander

B-C.

(1983). Energy in Swedish Manufacturing. Stockholm, Sweden: IUI.

Deregulation and Common Carriage in the Nordic Power System *

Abstract

Keywords

Get full access to this article

References