Power Markets Shaped by Antitrust

Posted by D. Daniel Sokol

Malgorzata M. Sadowska (University of Bologna) and Bert Willems (Tilburg University) analyze Power Markets Shaped by Antitrust

ABSTRACT: In November 2011 Sweden abolished the uniform national electricity price and introduced separate price zones.This was the result of an antitrust settlement between the Commission and the Swedish network operator, which was accused of discriminating between domestic and export electricity transmission services and segmenting the internal market. Based on this case, we show how the Commission uses competition law enforcement to foster market integration in the energy sector. We find that, even though the Commission’s action under competition rules was contrived and lacked economic depth, the commitment package provides an economically sound, long term solution to network access and congestion management in Sweden. Such a quick and far-reaching change of Swedish congestion management could not have been achieved by Swedish policymakers or enforcement of the EU sector-specific regulation.