Long-term price and environmental effects in a liberalised electricity market

W. Lise, G. Kruseman

Research output: Contribution to journalArticleAcademicpeer-review

25 Citations (Scopus)

Abstract

This paper studies the effects of endogenous investment decisions in a liberalised electricity market on prices and the environment in the time horizon 2000¿2050. Therefore, a computational, game-theoretic, recursive dynamic model is developed. Simulations with the model indicate that perfect competition leads to lower prices and benefits the environment in the form of lower acid and smog emissions. Continued exercise of market power leads to postponed investments and more diversity in the technology portfolio, while under perfect competition there is an earlier switch to gas-based technologies.
Original languageEnglish
Pages (from-to)230-248
Number of pages19
JournalEnergy Economics
Volume30
Issue number2
DOIs
Publication statusPublished - 2008

Keywords

  • strategic generation
  • power market
  • model
  • investment
  • responses
  • industry
  • system

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