COVID-19 lockdown and market power in the Italian electricity market
| Autor: | Paolo Polinori, Simona Bigerna, Maria Chiara D'Errico, Carlo Andrea Bollino |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2022 |
| Předmět: |
Demand side
Demand reduction Coronavirus disease 2019 (COVID-19) COVID19 pandemic lockdown Monetary economics Management Monitoring Policy and Law Lerner index Regulatory authority Market power Zonal lerner index General Energy Electricity market Power exchange Economics Mark-down Electricity market COVID19 pandemic lockdown Market power Zonal lerner index Mark-up Mark-down Mark-up |
| Popis: | The Italian electricity market was characterized by a remarkable decrease in demand during the COVID-19 lockdown (10 March to 2 June 2020). There were also negative peaks of over 50% and record low prices of about 20 Euro/MW. This paper aims to investigate the exercise of market power in the Italian power exchange during the pandemic, explicitly considering transmission line congestion, and disentangling the measure of the unilateral market power from congestion rent and re-dispatching costs. We computed the Zonal Lerner Index for every hour in January–June 2020 for the main operators on the supply and the demand side in the Italian day-ahead market. Furthermore, we analyzed the correlation between market power, congestion, and the effect of COVID-19. The results showed that the exercise of market power on the supply (mark-up) and demand (mark-down) sides were considerably weakened during peak hours by massive demand reduction. However, it was surprisingly reinforced during emergency periods in specific off-peak hours. Overall, the main players have somehow increased the intensity of market power during the COVID-19 pandemic crisis, which calls for more pro-competitive action by the regulatory authority and paying more attention to heterogeneous players’ behaviors. |
| Databáze: | OpenAIRE |
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