Abstract: The South American region has experienced a steady increase in its demand for electricity and faces several challenges in the development of the electricity sector. Among them, high fluctuations in hydro generation, high and volatile prices of fossil fuels, and environmental and social impacts associated to energy activities. Strengthening cooperation for cross-border electricity trade is considered a sustainable alternative for addressing these challenges. For the expansion of electricity trade among countries within the region, both infrastructure and a regulation that defines the conditions of the electric power exchanges between countries are required. A good regulatory framework would allow all market players to have access to the commercialization of energy with other countries in the region, guarantee that the treatment of exchanges is non-discriminatory, and maintain the efficiency, cost effectiveness and security characteristics operation of all electricity systems. In this context, this paper proposes a framework with the basic setting conditions for the import and export of energy from the “surplus” available for exchange. The empirical analysis of the regulatory proposal, based on simulations, shows that the exchange of energy from Chile with its neighboring countries is feasible in a clear and transparent manner, reducing the marginal costs of energy and the total cost of operation, keeping the average cost of generation relatively constant.

Abstract: This paper provides a comprehensive analysis of the market power problem in the Spanish power generation sector and examines how and to which extent the market has developed in terms of market power concerns after the market liberalization reforms. The methodology applied in this study includes typical ex-post structural and behavioral measures employed to estimate potential for market power, namely: concentration ratios (CR) (for the largest and the three largest suppliers), the Herfindahl-Hirschman Index (HHI), Entropy, Pivotal Supply Index, the Residual Supply Index and Residual Demand Elasticity (RDE). The results are presented for the two largest Spanish generating companies (Endesa and Iberdrola) acting in the Iberian Electricity Market (MIBEL), and in the Spanish Day-ahead electricity market. The results show evidence that these companies have behaved much more competitively in recent periods than in the beginning of the market liberalization. In addition, the paper discusses important structural and regulatory changes through market liberalization processes in the Spanish Day ahead electricity market. (C) 2016 Elsevier Ltd. All rights reserved.

Abstract: Chile was the first country that privatized all generation, transmission, and distribution services, and introduced competition in the generation segment. Nearly four decades after its creation, many features of the original electricity market design remain unchanged. In this paper, we provide a brief history of the Chilean electricity market and explain its main limitations going forward. Some of these include the use of a cost-based mechanism for spot transactions based on a merit-order curve, low temporal granularity of spot prices, missing forward markets to settle deviations from day-ahead commitments, inefficient pricing of greenhouse gas emissions due to administrative rules, and a capacity mechanism that does not reflect a clear resource adequacy target. Many of these limitations are also present in other electricity markets in Latin America that, when privatized, mirrored many features of the electricity market design in Chile. Failing to address these limitations will provide distorted incentives for the efficient entry and operation of resources that could impart flexibility to the system, increasing the cost of decarbonizing the power sector.