Real life applications of Yardstick Regulation frequently refer to historical cost data. While Yardstick Regulation cuts the link between fi rms own costs and prices firms may charge in a static setting, it does not in a dynamic setting where historical cost data is used. A fi rm can influence...

Liberalized electricity markets are characterized by a fluctuating price-inelastic demand, non-storable electricity and often show substantial market shares held by one or few incumbent firms. These characteristics have led to a controversial discussion concerning the need for and the design of...

The European Commission is introducing new regulations on submission and publication of data in electricity markets (SPDEM) and on wholesale energy market integrity and transparency (REMIT). I discuss issues relevant for undertaking an evaluation such regulations. I argue that, for market...

We analyze the treatment and impact of idiosyncratic or firm-specific risk in regulation. Regulatory authorities regularly ignore firm-specific characteristics, such as size or asset ages, implying different risk exposure in incentive regulation. In contrast, it is common to apply only a single...

Due to the 3rd Energy Package of 2009 the regulation of European electricity transmission did change considerably. Before, cross-border electricity issues have been regulated by voluntary contractual agreements between Transmission System Operators. Now, the new-founded Agency for the...

Long‐term energy contracts have featured prominently in many decisions of the European Commission to support the opening of the electricity markets. Contracts were seen to foreclose the market hence the Commission comprehensively unwound pre‐existing long‐term contracts and formulated...

Liberalization of network industries frequently separates the network from the other parts of the industry. This is important in particular for the electricity industry where private …rms invest into generation facilities, while network investments usually are controlled by regulators. We...

Current EU short-term market designs for electricity face several challenges in (i) securing efficient system operation (ii) unlocking the full potential of flexible resources and (iii) fostering effective use of transmission capacity. For a gradual reform of market design and to guarantee...

Decarbonization goals of the European Commission foresee different future scenarios for the European power market of which all are exceeding 60% renewables in the power system.3 High shares of intermittent renewable sources require significant changes to the physical system and impact the...

Prices may di er between regional markets if transport capacities are limited. We develop a new approach to determine to which extent such di erences stem from limited participation in cross-border trader rather than from bottlenecks. We derive a theoretical integration benchmark for the typical...