This paper analyzes the welfare implications of buyer mergers, which are mergers between downstream firms from different markets. We focus on the interaction between the merger's effects on downstream efficiency and on buyer power in a setup where one manufacturer with a non-linear cost function sells to two locally competitive retail markets. We show that size discounts for the merged entity has no ...
With the moratorium on nuclear energy, the German federal government passed a resolution to shut down seven nuclear power plants for a period of three months. According to the calculations of DIW Berlin (German Institute for Economic Research), sufficient electricity is being produced despite the nuclear plants' removal from the grid. Electricity prices are only likely to increase slightly. The moratorium ...
Opening the electricity market to renewable energy sources would create flexibility for the further integration of renewable energy, leading to considerably lower costs and emissions. This requires the electricity markets to be reorganized in three ways. Firstly, most trading, and therefore production decision-making, is completed at least one day prior to electricity production. But it must be possible ...
The expansion of renewable generation and closer integration of European power markets requires new tools and procedures for system operation. The US experience with nodal pricing offers options to tackle the emerging challenges, and thus may facilitate further integration of intermittent renewable generation technologies. At a one day roundtable hosted by CPI Berlin, experts from European transmission ...