Strategic Price Risk in the Wholesale Power Markets

Preface VII

Executive Summary IX

1: Electricity Markets are Different

2: The Persistence of Market Power

Introduction

Latent market power and market concentration

Latent market power in the UK duopoly

Comments on latent market power analysis

3: Simulating Dynamic Market Behaviour

Introduction

Computational details of the agent-based simulation model

Application to the England and Wales Pool

4: New Models for New Markets

Introduction

The agent-based simulation model

Simulation insights

Explaining the results

Conclusions

5: Market Structure Is Fundamental

Introduction

Using agent-based simulation

Analysis of the 1999 plant divestment issue in England and Wales

Summary and conclusions

6: Market Power in European Electricity

Lessons from the UK market

Development of EU electricity market legislation

Background to the liberalisation of the EU electricity market

Potential sources of residual market power

Mitigating the effects of market power

Conclusion

Appendix 1: Main Sources of Statistics1 Prices and Legislation

Appendix 2: Abbreviations and Acronyms

Derek W. Bunn is a Professor at London Business School, with research on the energy sector extending back more than 25 years. Author of over 180 research papers and 10 books in the areas of forecasting, decision analysis and energy economics, previously he was the Editor of Energy Economics, and has served on the editorial boards of 12 other journals including Management Science. He has advised many PhD students as well as numerous international companies and government agencies in this sector.