Long-run market equilibria in coupled energy sectors: A study of uniqueness

Egerer J, Grimm V, Grübel J, Zöttl G (2022)

Publication Type: Journal article, Original article

Publication year: 2022


Book Volume: 303

Pages Range: 1335-1354

Journal Issue: 3

DOI: 10.1016/j.ejor.2022.03.028


We propose an equilibrium model for coupled markets of multiple energy sectors. The agents in our model are operators of sector-specific production and sector-coupling technologies, as well as price-sensitive consumers with varying demand. We analyze long-run investment in production capacity in each sector and investment in coupling capacity between sectors, as well as production decisions determined at repeated spot markets. We show that in our multi-sector model, multiplicity of equilibria may occur, even if all assumptions hold that would be sufficient for uniqueness in a single-sector model. We then contribute to the literature by deriving sufficient conditions for the uniqueness of short- and long-run market equilibrium in coupled markets of multiple energy sectors. We illustrate via simple examples that these conditions are indeed required to guarantee uniqueness in general. The uniqueness result is an important step to be able to incorporate the proposed market equilibrium problem in more complex computational multilevel equilibrium models, in which uniqueness of lower levels is a prerequisite for obtaining meaningful solutions. Our analysis also paves the way to understand and analyze more complex sector coupling models in the future.

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Egerer, J., Grimm, V., Grübel, J., & Zöttl, G. (2022). Long-run market equilibria in coupled energy sectors: A study of uniqueness. European Journal of Operational Research, 303(3), 1335-1354. https://doi.org/10.1016/j.ejor.2022.03.028


Egerer, Jonas, et al. "Long-run market equilibria in coupled energy sectors: A study of uniqueness." European Journal of Operational Research 303.3 (2022): 1335-1354.

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