The interdependecy of the electricity markets of Hungary and the Balkan regionUploaded: 1 of January, 2008

In this study, we discuss the factor most often referred to when explaining the reasons for the significant increases recently experienced in Hungarian electricity prices: the situation in the South-East European power markets and its impact on the Hungarian electricity market. We will explore the background of the events that have occurred in the Southern European power markets and will describe the actual conditions existing with respect to the relations between the Balkans and the Hungarian power markets. We will answer the questions discussed in this study by providing simple statistical analyses on the one hand, and, on the other hand, by using a quantified equilibrium model that describes the Central and South-East European power markets. This model will help us investigate, in a consistent manner, the demand and supply conditions of the 14 countries in the Central and South-East European region, the network restrictions existing in the region, domestic wholesale power prices that will develop under the given restrictions and the conditions of a perfect competition, as well as commercial trends that have developed in the region.

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