Preface At the meeting between the Nordic competition authorities in Iceland 12 – 13 September 2002 it was decided to establish a working group on the power market. The mandate of the working group: The power markets in the Nordic countries have gone through major changes during the last decade: competition has been introduced and the national markets have been integrated. These processes have been successful but also brought new challenges for a suitable regulation of the market. Competition in the wholesale market for electric power takes place in the Nordic area, while competition policies are national. This raises the issue of an improved co-ordination of competition policy among the Nordic countries. Against this background the Nordic competition authorities decided at the meeting 13 September to establish a working group. The working group shall - identify common Nordic competition issues in the market for electric power,
- consider actions to handle obstacles to competition,
- consider suggestions to amend regulations in order to improve competition,
- suggest co-operation solutions to improve the effectiveness of competition law enforcement.
The working group shall also consider obstacles to competition as a consequence of the integration of actors between different levels of the power market. The working group shall take a broad view on competition policy, which means that it might be necessary to look at adjacent regulations of importance for the functioning of the markets, as for instance regulation of the electricity grids. The report of the working group shall be concluded by 1 June 2003 and shall be presented at the next meeting of the Nordic competition authorities in the autumn 2003.
The members of the working group have been: Lasse Ekeberg, the Norwegian Competition Authority (head)
Lasse Sundahl, the Danish Competition Authority
Marie Römpötti, the Swedish Competition Authority
Ove Skaug Halsos, the Norwegian Competition Authority
Per Kristian Bryng, the Norwegian Competition Authority The working group has met four times: Oslo 30 October 2002
Stockholm 20 January 2003
Copenhagen 14 March 2003
Oslo 2 – 3 June 2003 The report is organised in line with a typical competition analysis. In chapter 1 we give a general description of the Nordic power market. In chapter 2 the relevant markets are defined. Market concentration in the various relevant markets is calculated in chapter 3. In chapter 4 we discuss market power and its effects. Chapter 5 contains a market simulation modelling. Chapter 6 presents the legal framework and the scope for co-operation on cross-border mergers. Finally, chapter 7 contains our conclusions and recommendations. We would like to thank all those who have contributed with helpful comments and other inputs to the report. In particular, we wish to thank the Danish system operator Eltra for the model simulations used in chapter 5.
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