1 / 5

Discussion by Natalia Fabra Universidad Carlos III de Madrid Toulouse, 2 June 2005

Dual Fuel Competition in the British Electricity Retail Markets By Richard Green University of Hull Business School. Discussion by Natalia Fabra Universidad Carlos III de Madrid Toulouse, 2 June 2005. Summary. Analysis of competition between electricity and gas retailers offering dual fuel:

val
Download Presentation

Discussion by Natalia Fabra Universidad Carlos III de Madrid Toulouse, 2 June 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Dual Fuel Competition in the British Electricity Retail MarketsBy Richard GreenUniversity of Hull Business School Discussion by Natalia Fabra Universidad Carlos III de Madrid Toulouse, 2 June 2005

  2. Summary • Analysis of competition between electricity and gas retailers offering dual fuel: • Evolution of incumbents’ market shares • Importance of (firm-specific) consumer switching costs • Evidence: • Incumbents retain large market shares despite charging higher prices (positive correlation with switching costs) • The largest new entrants into the gas and electricity sectors are the electricity and gas incumbents, respectively • Vertical integration generation-supply business

  3. Summary • Static model of competition with switching costs • Switching costs make the incumbent (entrant) less (more) aggressive • Larger price differentials; Lower switching rates • Logit model of consumer choice • Empirical analysis

  4. Remarks • Dynamic considerations? Welfare analysis? • Dual-fuel deals enhance competition and tend to reduce current prices…but effect on future switching costs and future prices? • Dual-fuel deals: • Leverage of market power? • Defensive strategy? • Discrimination device? • Vertical integration generation-retailing: • Depending on the state of vertical integration, retail market shares may impact the retailers’ cost of acquiring electricity and gas • In turn, this should affect the intensity (and mode) of downstream competition • Incentives for integration between gas and electricity?

  5. Dual Fuel Competition in the British Electricity Retail MarketsBy Richard GreenUniversity of Hull Business School Discussion by Natalia Fabra Universidad Carlos III de Madrid Toulouse, 2 June 2005

More Related