Interconnections and market integration in the Irish Single Electricity Market

Nepal, Rabindra and Jamasb, Tooraj (2012) Interconnections and market integration in the Irish Single Electricity Market. Energy Policy, 51 425-434. doi:10.1016/j.enpol.2012.08.047

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Author Nepal, Rabindra
Jamasb, Tooraj
Title Interconnections and market integration in the Irish Single Electricity Market
Journal name Energy Policy   Check publisher's open access policy
ISSN 0301-4215
1873-6777
Publication date 2012-12-01
Year available 2012
Sub-type Article (original research)
DOI 10.1016/j.enpol.2012.08.047
Open Access Status Not Open Access
Volume 51
Start page 425
End page 434
Total pages 10
Place of publication London, United Kingdom
Publisher Elsevier Ltd
Language eng
Abstract Interconnections can be an effective way to increase competition and improve market integration in concentrated wholesale electricity markets with limited number of participants. This paper examines the potential for interconnections and increasing market integration in the Irish Single Electricity Market (SEM). We use a time-varying Kalman filter technique to assess the degree of market integration between SEM and other large, mature and interconnected wholesale electricity markets in Europe including Great Britain (GB). The results indicate no market integration between SEM and other European markets except for Elspot and GB. We show that the current state of market integration between SEM and GB is just 17% indicating potential to improve market integration via increased interconnector capacity. The results indicate that liquidity of wholesale markets might be a crucial factor in the market integration process while our results remain inconclusive in determining whether increased trade of renewables can improve market integration.
Keyword Market integration
Liquidity
Competition
Cointegration Vectors
Wholesale Market
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Non HERDC
School of Economics Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 3 times in Thomson Reuters Web of Science Article | Citations
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Created: Tue, 22 Oct 2013, 03:06:54 EST by Rabindra Nepal on behalf of School of Economics