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Will California come to Europe? A Numerical Simulation

Will California come to Europe? A Numerical Simulation We discuss under what conditions California’s electricity crisis may happen in Western European countries, taking The Netherlands as an example. We use a simulation model containing the electricity generation and distribution sector. We simulate exogenous events, such as a sudden shift in demand levels, a sharp rise in world fuel prices and a cutback in foreign supply. We use the model to investigate whether supply remains secured under different regulatory regimes. Our results suggest a trade-off between controlled prices and security of supply. Europe’s electricity supply security is vulnerable if prices are not allowed to reflect scarcity. If prices are unrestricted however, they will reach oligopoly levels. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Journal of Industry, Competition and Trade" Springer Journals

Will California come to Europe? A Numerical Simulation

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References (5)

Publisher
Springer Journals
Copyright
Copyright © 2002 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Economic Policy; R & D/Technology Policy; European Integration; Microeconomics; International Economics
ISSN
1566-1679
eISSN
1573-7012
DOI
10.1023/A:1020839223698
Publisher site
See Article on Publisher Site

Abstract

We discuss under what conditions California’s electricity crisis may happen in Western European countries, taking The Netherlands as an example. We use a simulation model containing the electricity generation and distribution sector. We simulate exogenous events, such as a sudden shift in demand levels, a sharp rise in world fuel prices and a cutback in foreign supply. We use the model to investigate whether supply remains secured under different regulatory regimes. Our results suggest a trade-off between controlled prices and security of supply. Europe’s electricity supply security is vulnerable if prices are not allowed to reflect scarcity. If prices are unrestricted however, they will reach oligopoly levels.

Journal

"Journal of Industry, Competition and Trade" – Springer Journals

Published: Oct 12, 2004

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