Authors: Raphaël Homayoun Boroumand; Phillip A. Cartwright
Addresses: Paris School of Business, 59 rue Nationale, 75013 Paris, France ' Paris School of Business, 59 rue Nationale, 75013 Paris, France
Abstract: The objective of liberalising electricity supply was to create competitive retail markets where asset-light suppliers would compete on price. This paper explores the quantitative and dynamic relationship between domestic retail prices and the wholesale price since one would expect a symmetric pattern with a stable and low retail margin. In this article, taking the UK market for analysis, a time-series approach is applied to calculate the extent and timing of pass through between wholesale and retail price variations. The preliminary results indicate that the impact effect and long-run effects from the wholesale to the retail market is quite low.
Keywords: electricity supply; UK; retail market; competition; time-series; causality; long-run response.
International Journal of Global Energy Issues, 2018 Vol.41 No.1/2/3/4, pp.98 - 107
Received: 29 Jun 2017
Accepted: 24 Jan 2018
Published online: 14 Jun 2018 *