Market integration and technology mix: Evidence from the German and French electricity markets

Klaus Gugler, Adhurim Haxhimusa

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung


We employ hourly data from German and French electricity markets and show that integration of German and
French electricity markets depends on the technology mix and the characteristics of neighbouring markets. Only when German and French electricity markets employ ‘similar’ generation mixes price spreads and the likelihood of the congestion of electricity flows are significantly reduced. We find that up to 31% of the price convergence is not attributed to the forces of arbitrage backed by interconnection capacities, but it is driven by coincident similarities in technology mixes. Furthermore, we document consistent evidence for the most important predictions of trade theory if markets are characterised by increasing marginal cost curves and limited cross-border capacities, i.e. limited convergence, congestion and cross-border externalities. Our results call for a coordinated
European energy policy.
Seiten (von - bis)30 - 46
FachzeitschriftEnergy Policy
PublikationsstatusVeröffentlicht - 2019

Österreichische Systematik der Wissenschaftszweige (ÖFOS)

  • 211
  • 502013 Industrieökonomik
  • 502034 Regulierungsökonomik