On the Battleground of Environmental and Competition Policy

Renewable energy sources have become increasingly important in the efforts to provide energy security and to fight global warming. In the last decade environmental policy has increased the support for renewable electricity. At the same time the electricity sector was often subject of antitrust investigation because of relevant market concentration, and market power. This book looks at the renewable electricity market to analyze the effect of environmental policy on competition. The first chapter provides a short introduction into the regulatory schemes of electricity markets. The second chapter analyzes the demand side of the electricity market. The third chapter derives a theoretical model where the different support regimes can be analyzed under oligopolistic market structure. Finally, in the last chapter a simulation model of the UK electricity market is used to test the effect of mergers and acquisitions under the environmental support scheme. The analysis of this book can help policy makers and national authorities to better understand and plan environmental policy taking into account the market structure of the electricity market.