Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109076
Authors: 
Fogelberg, Sara
Lazarczyk, Ewa
Year of Publication: 
2014
Series/Report no.: 
IFN Working Paper 1015
Abstract: 
Anecdotal evidence indicates that electricity producers use production failures to disguise strategic reductions of capacity in order to influence prices, but systematic evidence is lacking. We use a quasi-experimental set up and data from the Swedish energy market to examine such behavior. In a market without strategic withholding, the decision of reporting a failure should be independent of the market price. We show that marginal producers in fact base their decision to report a failure in part on prices, which indicates that failures are a result of economic incentives as well as of technical problems.
Subjects: 
Electricity markets
Urgent Market Messages (UMMs)
Unplanned failures
JEL: 
L49
L94
Document Type: 
Working Paper

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