Browsing by Author "Hogan, Seamus"
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Item Open Access A Critique of Wolak's Evaluation of the NZ Electricity Market: Introduction and Overview(Te Herenga Waka—Victoria University of Wellington, 2012) Hogan, Seamus; Jackson, Peter; Evans, LewisThis paper is the first in a symposium of papers that examine the 2009 report by Frank Wolak into the New Zealand electricity market. The Wolak report concluded that there had been a cumulative total of $4.3b (NZD) of overcharging in the New Zealand wholesale market over a period of seven years. In this paper we introduce the Wolak findings in the context of the salient features of the New Zealand market and explain that this headlinefigure is highly sensitive to some (quite unrealistic) assumptions about the structure of this market. The papers that follow this introduction examine Wolak's methodology and its empirical application.Item Restricted PUBL203: Public Policy: Introduction to Public Economics(Victoria University of Wellington, 2015) Hogan, SeamusItem Restricted PUBL209: Public Policy: Introduction to Public Economics(Victoria University of Wellington, 2015) Hogan, SeamusItem Open Access Vertical Integration and Market Power in Electricity Markets(Te Herenga Waka—Victoria University of Wellington, 2007) Hogan, Seamus; Meade, RichardSeamus Hogan presented Vertical Integration and Market Power in Electricity Markets at an ISCR seminar in Wellington on 1 May 2007Item Open Access Vertical Integration and Market Power in Electricity Markets(Te Herenga Waka—Victoria University of Wellington, 2007) Hogan, Seamus; Meade, RichardVertical separation of generation from electricity retailing has often been required as a condition of electricity market liberalisation. A well-developed and liquid contracts market is similarly suggested as necessary to manage the resulting wholesale market risks which risks are further exacerbated by competition. Such contracts markets are rare however and increasingly evidence is emerging that vertical integration is associated not just with improved wholesale market risk management but also reduced wholesale market power. This paper develops a theoretical model showing that non-vertically integrated generators will over-report their inverse supply curves with the incentive to over-report increasing with the firm's share of generating capacity. Conversely in a vertically integrated industry no over-reporting occurs when integrated firms have balanced shares in wholesale and retail markets. In general firms whose share of generating capacity is higher (lower) than their retail market share will over-report (under-report) their inverse supply functions. Integration is found to affect retail electricity prices only via its effect on retail marginal costs. We find that retail prices are higher with vertical separation than with either balanced integration or full integration without a wholesale market. These results suggest a re-evaluation of the importance of generator wholesale market power in vertically integrated electricity industries and of measures to improve retail market competitiveness under either vertical integration or separation.