Working Papers in Economics, Department of Economics, University of Bergen
Eirik S. Amundsen
Why has the Nordic electricity market worked so well?
() and Lars Bergman
Abstract: The general opinion among power industry representatives
and electricity market analysts is that the Nordic electricity market has
worked well. The purpose of this paper is to explore why the Nordic
electricity market has performed well and to consider to what extent the
Nordic experiences are relevant for other countries. In particular, we
investigate causes as to why the Nordic market managed to withstand the
supply shock in 2002 – 2003. A comparison is made with the California case,
and the potential problem of market power abuse is investigated in
particular. The relatively successful electricity market reform in the
Nordic countries seems to be attributable to: a simple but sound market
design, a successful dilution of market power, a strong political support
for deregulation and voluntary, informal commitment to public service by
the power industry.
Keywords: Nordic electricity market; California electricity market; supply shock; market power.; (follow links to similar papers)
JEL-Codes: L10; L11; L51; L94; (follow links to similar papers)
17 pages, December 16, 2005
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