Publicação
Algorithmic Pricing in a Wholesale Market
| Resumo: | EUPHEMIA, the algorithm for algorithmic pricing in a wholesale electricity market, aims to maximize social welfare. However, competition law focuses on consumer welfare, raising questions about its alignment with EU legal frameworks. While long-term contracts can manage risks, they may reduce short-term efficiency and foster imperfect competition, highlighting concerns about EUPHEMIA's compatibility with competition law and market efficiency. This research explores whether the EUPHEMIA algorithm aligns with EU competition law and electricity market regulations, particularly in balancing social welfare maximization and consumer welfare in the context of algorithmic pricing. Through a doctrinal analysis, this study examines key legal principles of EU competition law and energy regulations, addressing the risks of algorithmic collusion and market manipulation. The study further explores the Iberian electricity market (MIBEL) as an example, examining how its market characteristics—such as slow economic recovery, market concentration, and limited alternative energy sources—pose unique regulatory challenges. This study assesses whether integrating the Portuguese and Spanish electricity markets, and comparing them to EUPHEMIA, can offer alternative solutions for improving market efficiency, price stability, and competitiveness, particularly in the context of EU energy policy. This research assesses whether EUPHEMIA’s design and implementation comply with EU competition law and electricity market regulations, and whether it effectively balances the goals of social welfare maximization and consumer welfare. The study concludes with recommendations to design public policies for enhancing transparency, refining regulatory frameworks, and fostering responsible Artificial Intelligence (AI) integration within the European energy sector. |
|---|---|
| Autores principais: | Soromenho, João Tiago Carvalho |
| Assunto: | Algorithm Artificial Intelligence Energy Sector EUPHEMIA Iberian Peninsula Wholesale Market Inteligência Artificial Setor Energético EUPHEMIA Península Ibérica Mercado Grossista |
| Ano: | 2025 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | EUPHEMIA, the algorithm for algorithmic pricing in a wholesale electricity market, aims to maximize social welfare. However, competition law focuses on consumer welfare, raising questions about its alignment with EU legal frameworks. While long-term contracts can manage risks, they may reduce short-term efficiency and foster imperfect competition, highlighting concerns about EUPHEMIA's compatibility with competition law and market efficiency. This research explores whether the EUPHEMIA algorithm aligns with EU competition law and electricity market regulations, particularly in balancing social welfare maximization and consumer welfare in the context of algorithmic pricing. Through a doctrinal analysis, this study examines key legal principles of EU competition law and energy regulations, addressing the risks of algorithmic collusion and market manipulation. The study further explores the Iberian electricity market (MIBEL) as an example, examining how its market characteristics—such as slow economic recovery, market concentration, and limited alternative energy sources—pose unique regulatory challenges. This study assesses whether integrating the Portuguese and Spanish electricity markets, and comparing them to EUPHEMIA, can offer alternative solutions for improving market efficiency, price stability, and competitiveness, particularly in the context of EU energy policy. This research assesses whether EUPHEMIA’s design and implementation comply with EU competition law and electricity market regulations, and whether it effectively balances the goals of social welfare maximization and consumer welfare. The study concludes with recommendations to design public policies for enhancing transparency, refining regulatory frameworks, and fostering responsible Artificial Intelligence (AI) integration within the European energy sector. |
|---|