Ex post monitoring of market power in hydro dominated electrisity markets

Ex post monitoring of market power in hydro dominated electrisity markets

Author(s):

Maria Sandsmark, Berit Tennbakk

Publisher:

Molde University College

Report nr:

Working Paper 2007:8
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Isbn/Issn:

82-7962-085-0 / 978-82-7962-085-3

Publication type:

Notat
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Page number:

26

The paper presents a proposed market monitoring procedure that takes into account the special features of an electricity market that is based largely on hydro power. Specifically, we present a method to assess water values and a set of indicators that can be used to screen the market for suspicious price formation. We then use the suggested monitoring procedure to evaluate actual price formation in the Nordic Electricity Market during the (hydrological) year 2002/2003 when precipitation failed and spot prices at the electricity exchange Nord Pool hit an all-time high