Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1009: Real-time versus Day-ahead Market Power in a Hydro-based Electricity Market

Johannes Mauritzen () and Thomas TangerĂ¥s ()
Additional contact information
Johannes Mauritzen: Research Institute of Industrial Economics (IFN), Postal: and Norwegian School of Economics, Bergen, Norway
Thomas TangerĂ¥s: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: We analyse in a theoretical framework the link between real-time and day-ahead market performance in a hydro-based and imperfectly competitive wholesale electricity market. Theoretical predictions of the model are tested on data from the Nordic power exchange, Nord Pool Spot (NPS).We reject the hypothesis that prices at NPS were at their competitive levels throughout the period under examination. The empirical approach uses equilibrium prices and quantities and does not rely on bid data nor on estimation of demand or marginal cost functions.

Keywords: Hydro power; Market power; Nord Pool Spot

JEL-codes: D43; D92; L13; L94; Q41

25 pages, February 19, 2014

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