Giulietti, Monica, Grossi, Luigi and Waterson, Michael, 1950- (2009) Price transmission in the UK electricity market : was NETA beneficial? Working Paper. Economics Department, University of Warwick: University of Warwick. (The Warwick Economics Research Paper Series (TWERPS), Vol.2009).

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Abstract

This paper explores the relationship between domestic retail electricity prices in Great Britain and their determinants in the particular context of the New Electricity Trading Arrangements (NETA) introduced in 2001. The analysis requires a consistent comparison of wholesale power price series before and after NETA, which we investigate using a range of wholesale future price series. Despite its stated intention of reducing prices, we conclude that the net effect of NETA alongside other developments instead merely rearranged where money was made in the system.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Electric utilities -- Rates -- Great Britain -- History
Series Name:	The Warwick Economics Research Paper Series (TWERPS)
Publisher:	University of Warwick
Place of Publication:	Economics Department, University of Warwick
Date:	2009
Volume:	Vol.2009
Number:	No.913
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
Grant number:	RES 000-22-1686 (ESRC)
References:	Bushnell, J., Mansur, E. and C. Saravia. "Vertical Arrangements, Market Structure and Competition: An analysis of Restructured U.S. Electricity Markets." American Economic Review. Vol. 98, No. 1. March 2008. Cornwallenergy Associates for the National Right to Fuel Campaign (2008) Gas and Electricity Costs to Consumers, Unison Evans, J. and Green, R. (2003) “Why did British electricity prices fall after 1998?”, Hull University Business School, Research Memorandum 35. Evans, J. and Green, R. (2005), “Why did British electricity prices fall after 1998?”, Mimeo, University of Birmingham, July. Federico, G. & Rahman, D. (2003), "Bidding in an electricity pay-as-bid auction," Journal of Regulatory Economics, 24(2), 175-211. Gans, J S and Wolak, F A (2008) “A comparison of ex ante versus ex post vertical market power: evidence from the electricity supply industry”, mimeo, University of Melbourne. Green, R J and Newbery, D M (1992) “Competition in the British electricity spot market”, Journal of Political Economy, 100, 929-53. Littlechild, S (2005) Beyond Regulation, Institute of Economic Affairs. Meade, R. and S. O‟ Connor (2009) „Comparison of long-term contracts and vertical integration in decentralised electricity markets‟ Robert Schuman Centre for Advanced Studies, European University Institute, working paper No.2009-16 OFGEM (2002) New electricity trading arrangements (NETA)- One year review. OFGEM (2007) OFGEM Annual Report 2006-2007. OFGEM (2008) Energy Supply Probe. Initial Findings Report, September Sweeting, A (2007) “Market power in the England and Wales wholesale electricity market 1995-2000”, Economic Journal, 117, 654-685. Wolfram, C D (1999) “Measuring duopoly power in the British electricity spot market”, American Economic Review, 89, 805-826.
URI:	http://wrap.warwick.ac.uk/id/eprint/3558

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