Vertical separation vs. independent downstream entry in an electricity network: Experimental insights

Aitor Ciarreta, Enrique Fatas, Nikolaos Georgantzís, Carlos Gutiérrez-Hita

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Abstract

We analyze a realistic simulation of a complex electricity network. We obtain the data with a series of experimental sessions designed to closely replicate the Spanish electricity market. In the experiments reported here we compare the status quo with two alternative regulatory market structures. In one of them, labeled as vertical separation, we impose that power generating firms and electricity distributors operate as independent business groups. In the second, we study the effect of entry by independent end-suppliers. Both alternative scenarios dominate the status quo in terms of market efficiency, but the latter of them dominates the former.
Original languageEnglish
Pages (from-to)728–738
Number of pages11
JournalElectric Power Systems Research
Volume143
Early online date4 Nov 2016
DOIs
Publication statusPublished - Feb 2017

Keywords

  • Spanish Electricity Market
  • Vertical Relations
  • Laboratory Experiments

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