‘Trading Flexibility in Power Markets’

We are rounding off our Autumn seminar series in style on Friday 18th December, where our esteemed guest Peter Møllgaard (Copenhagen Business School) will present ‘Trading Flexibility in Power Markets‘. Peter is both a Professor of Industrial Organization and Head of the CBS Department of Economics. His main research interests lie in the application of industrial economics to competition policy, and he has published on a wide array of topics (including mergers, dominance, and damages claims). An abstract for his paper can be found below.

Abstract

Due to increased amounts of renewable energy supply, power markets increasingly value flexibility, i.e., the possibility to modify generation or demand within a timescale ranging from minutes to hours in response to variability. We set up an economic model of bilateral trade between a prosumer that offers to sell flexibility to an aggregator who, in turn, resells this flexibility in a marketplace. We show that flexibility trading is welfare enhancing as long as a transaction-cost reducing technology is in place.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03. Tea will be provided directly afterwards in the MBA Café (TPSC, Floor 2).

This is the final CCP seminar of the Autumn semester, but we will return in January 2016 with more cutting-edge commentary from the world of competition policy and regulation. You can keep up-to-date with our future seminars by visiting the designated pages on our website.

‘The effects of asymmetric costs on cartel damages: The importance of the counterfactual’

The CCP seminar returns from its Easter break on Friday 2nd May and we are delighted to welcome Peter Møllgaard (Copenhagen Business School) to the Centre. Peter will be presenting his article entitled ‘The effects of asymmetric costs on cartel damages: The importance of the counterfactual‘ which he has written with his colleague at Copenhagen, Petter Berg. An earlier draft of the article can be found at this link, and an abstract for the paper can be found below.

Abstract

Cartel overcharges and the resultant damages and welfare losses are typically calculated by subtracting counterfactual prices from cartel prices. We determine both prices in a repeated game with cost asymmetries and product differentiation. Whereas cost asymmetries and product differentiation signifcantly affect counterfactual prices, they only have small effects on collusive prices. We find that over-charges and losses in consumer welfare increase with the degree of cost symmetry and substitutability of products. The case of symmetric costs and homogeneous products makes for the extreme case in which welfare losses are maximal and restitution of damages undercompensates consumers the most.

The seminar will take place from 13:00-14:00 in the Elizabeth Fry Building, Room 1.01.