This article focuses on the deregulation which leads to the marked reductions in the price of telephone services and electricity. In Germany the national monopoly on the provision of telephone services was abolished in 1995, followed, in the spring of 1998, by the ending of the regional monopolies on the supply of electricity. Since these dates the two industries have been exposed to the laws of competition. New companies, or those previously active only in certain regions, are now able to compete for telephone and electricity customers throughout the country. The competition to which this has given rise has led to marked cuts in prices; in doing so it has improved Germany's international competitive position. The established companies in these sectors have been obliged to cut their costs drastically and to pay greater heed to the needs of their customers. In order for the efficiency gains achieved to be maintained, steps must be taken to ensure that competition is not threatened by concentration processes. As a rule, state-regulated monopolies deploy more capital and labor than is necessary. This incurs higher costs and often leads to over-capacity. It could therefore be reasonably expected that introducing competition into the telecommunications and electricity-supply sectors would enable substantial cost and price reductions to be achieved. In the short run the size of these effects depends on current supply and demand behavior and in the long run, on additional, structural factors.
Energy Policy. Oct2011, Vol. 39 Issue 10, p6178-6189. 12p.
Markets, Market power, Prices, Public welfare, Energy shortages, Electric vehicles, and Electricity
Abstract: We use a game-theoretic model to analyze the impacts of a hypothetical fleet of plug-in electric vehicles on the imperfectly competitive German electricity market. Electric vehicles bring both additional demand and additional storage capacity to the market. We determine the effects on prices, welfare, and electricity generation for various cases with different players in charge of vehicle operations. Vehicle loading increases generator profits, but decreases consumer surplus in the power market. If excess vehicle batteries can be used for storage, welfare results are reversed: generating firms suffer from the price-smoothing effect of additional storage, whereas power consumers benefit despite increasing overall demand. Strategic players tend to under-utilize the storage capacity of the vehicle fleet, which may have negative welfare implications. In contrast, we find a market power-mitigating effect of electric vehicle recharging on oligopolistic generators. Overall, electric vehicles are unlikely to be a relevant source of market power in Germany in the foreseeable future. [Copyright &y& Elsevier]
Energy Policy. Jan2011, Vol. 39 Issue 1, p386-394. 9p.
Risk premiums, Prices, Economics, and Electricity
Abstract: This paper conducts an empirical analysis of risk premiums in the German day-ahead Electricity Wholesale Market. We compare hourly price data of the European Energy Exchange (EEX) auction and of the continuous over-the-counter (OTC) market which takes place prior to the EEX auction. Data provided by the Energy Exchange Austria (EXAA) has been used as a snapshot of the OTC market two hours prior to the EEX auction. Ex post analysis found market participants are willing to pay both significant positive and negative premiums for hourly contracts. The largest positive premiums were paid for high demand evening peak hours on weekdays during winter months. By contrast, night hours on weekends featuring lowest demand levels display negative premiums. Additionally, ex ante analysis found a strong positive correlation between the expected tightness of the system and positive premiums. For this purpose, a tightness factor has been introduced that includes expectations of fundamental factors such as power plant availability, wind power production and demand. Hence, findings by can be supported that power traders in liberalised markets behave like risk-averse rational economic agents. [ABSTRACT FROM AUTHOR]
Novel periodic extensions of dynamic long-memory regression models with autoregressive conditional heteroscedastic errors are considered for the analysis of daily electricity spot prices. The parameters of the model with mean and variance specifications are estimated simultaneously by the method of approximate maximum likelihood. The methods are implemented for time series of 1,200-4,400 daily price observations in tour European power markets. Apart from persistence, heteroscedasticity, and extreme observations in prices, a novel empirical finding is the importance of day-of-the-week periodicity in the autocovariance function of electricity spot prices. In particular, the very persistent daily log prices from the Nord Pool power exchange of Norway are effectively modeled by our framework, which is also extended with explanatory variables to capture supply-and-demand effects. The daily log prices of the other three electricity markets--EEX in Germany, Powernext in France, and APX in The Netherlands are less persistent, but periodicity is also highly significant. The dynamic behavior differs from market to market and depends primarily on the method of power generation: hydro power, power generated from fossil fuels, or nuclear power. The article improves on existing models in capturing the memory characteristics, which are important in derivative pricing and real option analysis. [ABSTRACT FROM AUTHOR]
Economist. 8/28/1999, Vol. 352 Issue 8134, p49-50. 2p. 1 Black and White Photograph, 1 Graph.
Public utilities, Deregulation, Telephone companies, Mergers & acquisitions, Prices, and Electricity
Reports the trends in deregulation of utilities in Germany. Effect of deregulation of telephone and electrical prices; Difficulties for utility companies in light of the price war; Possible consolidation because of the trend.
Reports on the allegation of Danish utility Elsam that the market model for power trading between Denmark and Germany is responsible for the sharp increases of electricity prices in western Denmark at the end of August 2003 and the beginning of September 2003. Role of Eltra in the price increases; Estimated amount of electricity exported by elsam in Germany; Accusation to Elsam.