Towards a Single Energy Market
Edited by Jean-Michel Glachant and François Lévêque
Chapter 9: The EU Integration of the New Member States’ Electricity Markets – Testing for Wholesale Price Convergence Using the Kalman Filter
9. The EU integration of the new Member States’ electricity markets – testing for wholesale price convergence using the Kalman ﬁlter1 Georg Zachmann2 INTRODUCTION This chapter focuses on the integration process of the East European new Member States in the single electricity market. The advantages of a common electricity market are obvious: dissimilar national production and demand patterns can be combined to optimize the merit order internationally, intranational market power can be mitigated by international players and reserves can be used more eﬃciently by international sharing. Although this process has been underway for a few years, there is only a limited number of empirical works inferring the success of the common market policy in the electricity sector. This is the case not only for Eastern Europe, but for the EU single market as well. One can distinguish two approaches to the issue of integration: one that analyses the status quo market integration, and one that infers the process of convergence. In this context we understand integration as a static measure for the interaction of markets in a given period of time. The dynamic process of increasing market integration is called convergence. Zachmann (2005) summarizes the handful of studies on European market integration, all of which focus on Western Europe, the ‘old’ EU-15 or subsamples thereof. Studies on the integration of ‘new’ and ‘old’ Member States’ electricity markets do not exist so far. This is a deﬁcit, since already before the political enlargement of the European Union in 2004, the...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.