Measuring market power in the wholesale electricity Iberian market through the residual demand curve elasticity

The existence of market power in the Iberian electricity market is well known. The measurement and the understanding of market power practices in the Iberian electricity market turn out to be very interesting considering the particular case of Portuguese and Spanish markets, where two antagonistic factors remain active: liberalization and the strong, direct government intervention. For various reasons, among which the difficulty in obtaining the data stands out, market power in the Iberian electricity market has rarely been measured. This work aims to contribute to a better knowledge of the way the market power occurs in the Iberian electricity market, applying a particular methodology to determine the market power, highlighted by the works of Frank Wolak in the electricity sector. Our work analyzes the results obtained in the light of the evolution of the electricity sector during the analyzed period.