Journal of Energy Markets

Transmission congestion and market power: the case of the Norwegian electricity market

Faisal Mehmood Mirza and Olvar Bergland


We estimate the noncompetitive effects of transmission congestion in the Norwegian electricity market and test the hypothesis that opportunities for producers to exercise their market power increase when transmission constraints become binding. By specifying a structural model and using hourly data for southern Norway from February 2004 to April 2008, we find that, on average, prices have remained close to the competitive equilibrium, but producers more often exercise their market power during some specific hours when transmission constraint becomes binding. However, average markups above the marginal costs in any of these specific hours do not exceed 1%.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here