Working paper

Linking electricity prices and costs in bottom-up top-down coupling under changing market environments

We couple top-down and bottom-up models to analyse electricity markets. We simulate energy policies under alternative regulatory assumptions. We shows that market liberalisation affects the links between generation costs and user prices. We show that the coupling mechanisms should reflect the nature of electricity market regulation. We show that a tax on electricity is more effective in a liberalized than in a regulated market.

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