Bid analysis of the Italian electricity market for the identification of players´ strategic behavior

In the framework of the European deregulation, the Italian electricity market was completely opened for competition in 2004. This market is characterized by a highly concentrated ownership together with an inelastic demand and limited transmission capacity in some interfaces, which make it sensitive to market power. To promote the competition, on April 29th, 2009, the Italian Government has approved new rules about the publications of the bids submitted by the players. In particular, the Italian Power Exchange has to publish the bids seven days later. This paper presents an analysis of the bids presented by the market players (with particular reference to the generating companies) for 2008 and the first part of 2009.