Market imperfections on the power markets in northern Europe: A survey paper

Up till now, most analyses of the northern European electricity liberalisation have assumed that a perfect competitive electricity market can be obtained. It has not been taken into account that a number of imperfections will inevitably occur – at least during the transition period. These imperfections can be technical, economic or tradition-bound, and can also have political characteristics.

It is important to recognise and incorporate the market imperfections in the liberalisation policy and analysis. Otherwise, the purposes of the liberalisation and other energy policy goals may not be achieved. The aim of this paper is to survey market imperfections and their influence on the liberalisation processes in northern Europe.