Trading in the Downstream European Gas Market: A Successive Oligopoly Approach

Boots, M.G.; Rijkers, F.A.M.; Hobbs, Benjamin F.

doi:10.5547/issn0195-6574-ej-vol25-no3-5

Cited by 126 publications

(79 citation statements)

References 21 publications

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“…Estrada and Fugleberg (1989), Al-Sahlawi (1989). Boots et al (2004) use elasticities from Pindyck (1979) which are considerably higher (between 1.17 and 2.23). 11 For more details about programmation in the MCP format see Rutherford (1995) and Ferris and Munson (2000).…”

Section: Simulation Resultsmentioning

confidence: 99%

“…However, a number of simplifying assumptions, such as symmetry of traders, diminish the generality of this approach of double marginalization. Moreover, Boots et al (2004)assume the domestic production to be an exogenous value instead of including it in the optimization. Another difference with GASMOD (see details in section 3) is the use of cost functions and linear demand functions from Golombek et al (1995).…”

Section: State Of the Literaturementioning

confidence: 99%

“…The GASTALE model (Boots et al (2004)) is the first attempt to apply the structure of successive oligopoly in gas production and trading in a large-scale simulation model. This model is similar to ours in that its underlying structure is a two-stage game.…”

Section: State Of the Literaturementioning

confidence: 99%

See 2 more Smart Citations

A strategic model of European gas supply (GASMOD)

Holz¹,

Hirschhausen²,

Kemfert³

2008

Energy Economics

175

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Abstract:Structural changes in the European natural gas market such as liberalization, increasing demand, and growing import dependency have triggered new attempts to model this market accurately. This paper presents a model of the European natural gas supply, GASMOD, which is structured as a two-stagegame of successive natural gas exports to Europe (upstream market) and wholesale trade within Europe (downstream market), and which explicitly includes infrastructure capacities. We compare three possible market scenarios: Cournot competition on both markets, perfect competition on both markets, and perfect competition on the downstream with Cournot competition on the upstream market. We find that Cournot competition on both markets is the most realistic representation of today's European natural gas market, where suppliers at both stages generate a mark-up at the expense of the final customer (double marginalization). Our results yield a diversified supply portfolio with newly emerging (LNG) exporters gaining market shares. Enforcing perfect competition on the European downstream market would in positive welfare effects. The limited infrastructure strongly influences the results, and we identify bottlenecks mainly for intra-European trade relations whereas transport capacity on the upstream market is sufficient (with the exception of Norwegian exports) in the Cournot scenario. Zusammenfassung:Der

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Section: Simulation Resultsmentioning

confidence: 99%

Section: State Of the Literaturementioning

confidence: 99%

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A strategic model of European gas supply (GASMOD)

Holz¹,

Hirschhausen²,

Kemfert³

2008

Energy Economics

175

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“…Pre-liberalization models were published by Golombek et al [30,31] to assess the potential impact of liberalization on the West European gas market. Follow up model setups were built by several groups of Dutch teams: ECN's GASTALE [32], CPB group's NATGAS [33], and TNO-NITG Thesis work ENETSIM [34]. The latter study used an agent-based economic optimization modeling framework following Tesfatsion [35], using a MATLAB model platform; the relevant algorithms appear in van Benthem ( [34], pp.…”

Section: European Gas Market Modelsmentioning

confidence: 99%

Review of models and actors in energy mix optimization – can leader visions and decisions align with optimum model strategies for our future energy systems?

Weijermars

Taylor

Bahn

et al. 2012

Energy Strategy Reviews

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A B S T R A C TOrganizational behavior and stakeholder processes continually influence energy strategy choices and decisions. Although theoretical optimizations can provide guidance for energy mix decisions from a pure physical systems engineering point of view, these solutions might not be optimal from a political or social perspective. Improving the transparency of our vision sharing and strategy making processes in a systematic way is therefore as important as the actual systems engineering solutions proposed by the modeling tools. Energy trend forecasting and back-casting, scenarios and system analysis have matured into powerful modeling tools for providing advice on optimizing our future energy solutions. The integrated use and iterative improvement of all these approaches can result in energy systems that become better optimized. Such an integrated approach is particularly important to those who have decision-making power over our future energy direction. Some of the challenges and opportunities for energy strategists that strive to promote optimal decisions on our future energy solutions are highlighted in this state-ofthe-art review.

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“…Thus, several models have indicated that market power is indeed an issue in the European natural gas market, amongst them Boots et al (2004), Egging and Gabriel (2006), and Egging et al (2008). Smeers (2008) summarized and discussed the papers that develop strategic models of European gas supply.…”

Section: Introduction: the European Natural Gas Marketmentioning

confidence: 99%

Perspectives of the European Natural Gas Markets Until 2025

Holz¹,

Hirschhausen²,

Kemfert³

2009

The Energy Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe apply the EMF 23 study design to simulate the effects of the reference case and the scenarios to European natural gas supplies to 2025. We use GASMOD, a strategic several-layer model of European gas supply, consisting of upstream natural gas producers, traders in each consuming European country (or region), and final demand. Our model results suggest rather modest changes in the overall supply situation of natural gas to Europe, indicating that current worries about energy supply security issues may be overrated. LNG will likely increase its share of European natural gas imports in the future, Russia will not dominate the European imports (~ share of 1/3), the Middle East will continue to be a rather modest supplier, the UK is successfully converting from being a natural gas exporter to become a transit node for LNG towards continental Europe, and congested pipeline infrastructure, and in some cases LNG terminals, will remain a feature of the European gas markets, but less than in the current situation.

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Trading in the Downstream European Gas Market: A Successive Oligopoly Approach

Cited by 126 publications

References 21 publications

A strategic model of European gas supply (GASMOD)

A strategic model of European gas supply (GASMOD)

Review of models and actors in energy mix optimization – can leader visions and decisions align with optimum model strategies for our future energy systems?

Perspectives of the European Natural Gas Markets Until 2025

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