Category Archives: Working Papers 2008

EPRG 0829

Pär Holmberg, David Newbery and Daniel Ralph

Supply Function Equilibria: Step functions and continuous representations

EPRG 0829 Non-Technical Summary | PDF

Also published in:

  • Holmberg, P,Newbery D & Ralph, D, “Supply Function Equilibria: Step functions and continuous representations”, Journal of Economic Theory

Abstract: In most wholesale electricity markets generators must submit step-function offers of supply to a uniform price auction, and the market is cleared at the price of the most expensive offer needed to meet realised demand. Such markets can most elegantly be modelled as the pure-strategy, Nash Equilibrium of continuous supply functions, in which each supplier has a unique profit maximising choice of supply function given the choices of other suppliers. Critics argue that the discreteness and discontinuity of the required steps can rule out pure-strategy equilibria and may result in price instability. This paper argues that if prices must be selected from a finite set the resulting step function converges to the continuous supply function as the number of steps increases, reconciling the apparently very disparate approaches to modelling electricity markets.

Keywords: Auctions, supply function equilibria, convergence of step-functions, electricity markets

EPRG 0828

Xi Liang, David Reiner and Karsten Neuhoff Current Legal and Institutional Frameworks for Investing in Lower Carbon Electricity in China EPRG 0828 Non-Technical Summary | PDF Abstract: The economic and policy framework for investment decisions in the power generation sector in China are investigated. Our analysis combines a review of the existing legal framework with… Read more

EPRG 0827

William Yu, Tooraj Jamasb, Michael Pollitt Does Weather Explain the Cost and Quality? An Analysis of UK Electricity Distribution Companies EPRG 0827 Non-Technical Summary | PDF Also published in: Yu, W., Jamasb, T. and Pollitt, M. (2009), “Does Weather Explain the Cost and Quality Performance? An Analysis of UK Electricity Distribution Companies”, Energy Policy 37(11)… Read more

EPRG 0826

Dominique Finon, Fabien Roques Financing arrangements and industrial organisation for new nuclear build in electricity markets EPRG 0826 Non-Technical Summary | PDF Also published in: D. Finon & F. Roques, (2008). “Financing Arrangements and Industrial Organisation for New Nuclear Build in Electricity Markets,” Competition and Regulation in Network Industries, Intersentia, vol. 9(3), pages 247-282, September Abstract:… Read more

EPRG 0825

Maike Sippel, Karsten Neuhoff Lessons from conditionality provision for south-north cooperation on climate change EPRG 0825 Non-Technical Summary | PDF Also published in: Sippel, M. and Neuhoff, K. (2009), “A History of Conditionality: Lessons for International Cooperation on Climate Policy”, Climate Policy 9(5) Abstract: This article examines what may be taken into account, when designing… Read more

EPRG 0824

David Newbery Analytic Solutions for Supply Function Equilibria: Uniqueness and Stability EPRG 0824 Non-Technical Summary | PDF Also published in: Holmberg, P., D.M. Newbery and D. Ralph (2008) ‘Supply Function Equilibria: Step functions and continuous representations’, submitted to Journal of Economic Theory Abstract: Supply Function Equilibria (SFE) offer an attractive equilibrium concept for an electricity… Read more

EPRG 0823

Jevgenijs Steinbuks Financial constraints and firms’ investment: results of a natural experiment measuring firm response to power interruption EPRG 0823 Non-Technical Summary | PDF Abstract: This study uses the observed differences between public system failures and private investment as a natural experiment to reveal the effect of financing constraints on firms’ ability to substitute specifically… Read more

EPRG 0822

Tao Zhang, William Nuttall Evaluating Government’s Policies on Promoting Smart Metering in Retail Electricity Markets via Agent Based Simulation EPRG 0822 Non-Technical Summary | PDF Also published in: Zhang, T. and Nuttall, W. J. (2011), Evaluating Government’s Policies on Promoting Smart Metering Diffusion in Retail Electricity Markets via Agent-Based Simulation. Journal of Product Innovation Management,… Read more

EPRG 0821

 David Newbery Predicting market power in wholesale electricity markets EPRG 0821 Non-Technical Summary | PDF Also published in: Newbery, David (2009). “Predicting Market Power in Wholesale Electricity Markets,” RSCAS Working Papers 2009/03, European University Institute Abstract: The traditional measure of market power is the HHI, which gives implausible results given the low elasticity of demand… Read more

EPRG 0820

 Paul Nillesen, Michael G Pollitt Ownership unbundling in electricity distribution: empirical evidence from New Zealand EPRG 0820 Non-Technical Summary | PDF Also published in: Nillesen, P.H. and Pollitt, M.G. , “Ownership unbundling in electricity distribution: empirical evidence from New Zealand”, Review of Industrial Organization Abstract: New Zealand is the only country to date to have… Read more

EPRG 0819

John Kwoka, Sanem Ozturk, Michael G Pollitt Divestiture Policy and Operating Efficiency in US Electric Power Distribution EPRG 0819 Non-Technical Summary | PDF Also published in: Kwoka, J., Pollitt, M. and Sergici, S. (2010) “Divestiture Policy and Operating Efficiency in U.S. Electric Power Distribution”, Journal of Regulatory Economics, Vol. 38 (1), pp.86-109 Abstract: This study… Read more

EPRG 0818

Victoire Maugis, William J Nuttall Metapolicy Options for Energy in England EPRG 0818 Non-Technical Summary | PDF Abstract: This paper considers policy for policy-making – “metapolicy”. It specifically considers the current structures for energy policy making applying to England within the UK. The current policy landscape is described with a view to assessing possible improvements… Read more

EPRG 0817

Paul Nillesen, Michael Pollitt Using regulatory benchmarking techniques to set company performance targets: the case of US electricity EPRG 0817 Non-Technical Summary | PDF Also published in: Nillesen, P. and Pollitt, M. (2010), “Using Regulatory Benchmarking Techniques to Set Company Performance Targets: the Case of US Electricity”, Competition and Regulation in Network Industries 1 Abstract:… Read more

EPRG 0816

Gert Brunekreeft Ownership Unbundling in Electricity Markets – A Social Cost Benefit Analysis of the German TSOs EPRG 0816 Non-Technical Summary | PDF Abstract: This paper presents a social cost benefit analysis of ownership unbundling (as compared to legal und functional unbundling) of the electricity transmission system operators in Germany. The study relies on the… Read more

EPRG 0815

David Newbery Under-pricing electricity and the puzzle of regulatory accounting EPRG 0815 Non-Technical Summary | PDF Abstract: State-owned electricity companies typically set prices that are too low to finance new investment when needed, and which create additional problems where private investment is sought. The paper asks to what extent this can be attributed to historic… Read more

EPRG 0814

William Nuttall, Simon Taylor Financing the Nuclear Renaissance EPRG 0814 Non-Technical Summary | PDF Also was published in: Financing the Nuclear Renaissance, European Review of Energy Markets, 3 (2) pp. 187-202 Available at European Energy Institute Abstract: This paper considers the key economic risks associated with nuclear power. The authors observe that the bulk of… Read more

EPRG 0813

Christian Wolf Does Ownership Matter? The Performance and Efficiency of State Oil vs Private Oil (1987-2006) EPRG 0813 Non-Technical Summary | PDF Abstract: This paper investigates whether there are systematic performance and efficiency differentials between National Oil Companies (NOCs) and privately-owned oil companies. The dataset is based on a survey published by Energy Intelligence and… Read more

EPRG 0812

Vincent Rious, Jean-Michel Glachant, Yannick Perez, Philippe Dessante The diversity of design of TSOs EPRG 0812 Non-Technical Summary | PDF Abstract: It is puzzling today to explain diversity and imperfection of actual transmission monopoly designs in competitive electricity markets. We argue that transmission monopoly in competitive electricity markets has to be analysed within a Wilson… Read more

EPRG 0811

Michael Pollitt The Future of Electricity (and Gas) Regulation EPRG 0811 Non-Technical Summary | PDF Also published in: Pollitt, M. (2008), “The Future of Electricity (and Gas) Regulation in a Low-carbon Policy World”, The Energy Journal 29 (Special Issue 2) Abstract: This paper discusses whether a new paradigm is necessary for independent economic regulation of… Read more

EPRG 0810

Fabien Roques Market Design for Generation Adequacy: Healing Causes rather than Symptoms EPRG 0810 Non-Technical Summary | PDF Abstract: This paper argues that electricity market reform – particularly the need for complementary mechanisms to remunerate capacity – need to be analysed in the light of the local regulatory and institutional environment. If there is a… Read more

EPRG 0809

Karsten Neuhoff Learning by Doing with Constrained Growth Rates and Application to Energy Technology Policy EPRG 0809 Non-Technical Summary | PDF Abstract: Learning by doing attributes cost reductions of a technology to cumulative investment and thus experience. This paper argues that the additional dimension of investment volume growth rate has to be considered. This growth… Read more

EPRG 0808

Simon Taylor Nuclear Power and Deregulated Electricity Markets: Lessons from British Energy EPRG 0808 Non-Technical Summary | PDF Also published in: Taylor, Simon. (2007), “Nuclear Power and Deregulated Electricity Markets: Lessons from British Energy”, DIW Conference, CESSA Abstract: The privatisation in 1996 and subsequent financial crisis in 2002 of the company British Energy plc shed… Read more

EPRG 0807

John Ash Energy Supply, Risk and Justice: Regulatory Strategies for an Era of Limited Trust EPRG 0807 Non-Technical Summary | PDF Also Published in: New Nuclear Energy, Risk and Justice: Regulatory Strategies for an Era of Limited Trust, Politics & Policy 38(2) 2010, 255-284. Available at Wiley InterScience Abstract: Regulatory organisations responsible for implementing safety… Read more

EPRG 0806

Tooraj Jamasb, Michael Pollitt, Thomas Triebs Productivity and Efficiency of US Gas Transmission Companies: A European Regulatory Perspective EPRG 0806 Non-Technical Summary | PDF Also published in: Jamasb, T., Pollitt, M. and Triebs, T. (2008), “Productivity and Efficiency of US Gas Transmission Companies: A European Regulatory Perspective”, Energy Policy 36(9) Abstract: On both sides of the… Read more

EPRG 0805

Christian Wolf, Michael Pollitt Privatising national oil companies: Assessing the impact on firm performance EPRG 0805 Non-Technical Summary | PDF Abstract: This study empirically investigates the impact of privatisation on firm performance in the global oil and gas industry, where questions of resource control have regained widespread attention. Using a dataset of 60 public share… Read more

EPRG 0804

Aurélie Méjean, Chris Hope Modelling the costs of non-conventional oil: A case study of Canadian bitumen EPRG 0804 Non-Technical Summary | PDF Also published in: Energy Policy 36 (11) 2008, 4205-4216.  Available at ScienceDirect Abstract: High crude oil prices, uncertainties about the consequences of climate change and the eventual decline of conventional oil production raise… Read more

EPRG 0803

Elizabeth Hooper, Andrei Medvedev Electrifying Integration: Electricity Production And The South-East Regional Energy Market EPRG 0803 Non-Technical Summary | PDF Also published in: Hooper, E. and Medvedev, A. (2009), “Electrifying Integration: Electricity Production And The South-East Europe Regional Energy Market:”, Utilities Policy 17(1) Abstract: The paper provides an overview of the generation of electricity in… Read more

EPRG 0802

Tooraj Jamasb, Hande Kiamil, Rabindra Nepal Hot Issue and Burning Options in Waste Management: A Social Cost Benefit Analysis of Waste-to-Energy in the UK EPRG 0802 Non-Technical Summary | PDF Also published in: Jamasb, T; H. Kiamil & R. Nepal (2010) “Hot Issue and Burning Options in Waste Management : A Social Cost Benefit Analysis… Read more

EPRG 0801

David Reiner A Looming Rhetorical Gap: A Survey of Public Communications Activities For Carbon Dioxide Capture and Storage Technologies EPRG 0801 Non Technical Summary | PDF Abstract: The major communications efforts to the general public on carbon dioxide capture and storage (CCS) technologies are reviewed and found to be lacking across all countries and initiatives… Read more