Regulatory Changes and their Effects on the Performance of the Spanish Electricity Pool in 2004-2006 [Efeitos de mudanças regulatórias sobre o desempenho do pool elétrico espanhol entre 2004 e 20066] [Efectos de cambios regulatorios sobre el desempeño del pool eléctrico español entre 2004 y 2006]

This paper examines the relation between the Gap of the marginal price in the Spanish electricity market and other variables, the industrial organization of this market, and key regulatory changes affecting the market. We estimate a panel model with a large time series dimension in a small cross section of firms. We find that, due to high market concentration, the biggest firms are pivotal in the determination of market prices, distorting them and distancing them from competitive prices. The regulatory changes implemented did not have their intended effects, but rather created more distortions and perverse incentives in the market. © Revista de Economía del Rosario. Universidad del Rosario.

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