Market power in power markets: The case of French wholesale electricity market

The French wholesale market is set to expand in the next few years under European pressures and national decisions. In this paper, we investigate the performance of the French wholesale power market to examine whether or not the equilibrium outcomes are competitive. After a literature review on the different existing models, an extension of the Bresnahan - Lau (1982) method in panel data framework is employed with hourly dataset during 2009-2012 on the French wholesale market. The model-based results suggest that though market power is found statistically significant in several peak-load hours, it stays at very low level. On average, no market power is exercised over the examined period. These results correspond with the extremely regulated wholesale power market in France. It is of high interest given the future evolution of the French wholesale market which will be among the biggest in Europe in 2016 after the end of regulated tariffs for all firms.nonouirechercheInternationa