Mergers in the GB Electricity Market: Effects on Retail Charges
Paris : Observatoire français des conjonctures économiquestoto
Documents de travail de l'OFCE : 2006-8
Energy Competition, Retail Pricing, Vertically Integrated Firms
The opening up of the UK residential electricity sector in 1999 prompted several studies of the impact this had on both the level and structuring of retail charges, and on incumbent players’ market power. Drawing on observations of regional tariffs for the month of January 2004, this paper supports previous conclusions based on simulated retail charges, looking at the response of real tariffs to distribution and transmission costs, customer density, and the length of low voltage underground circuit. We also investigate whether vertically integrated suppliers have a particular effect on charges ceteris paribus the effect of cost drivers and supplier-related factors.