At present, several countries, such as England and Nordic countries, has privatized their electricity industry and established the power pool market to allow more competition. Electricity market differs from other commodity market because electricity is non-storable. This resulted in high volatility in electricity price which may damage economy of the nation and also becomes the important problem after establishing the central electricity market in many coutries. This thesis aimed at studying the transmission of factor volatility that has pass-through on the electricity price in England and Nordic electricity markets and use these countries experience in estimating the result of privatization and liberalization in Thai electricity industry due to the expectation that price volatility in England and Nordic electricity market can reflect price volatility in Thailand under the same pattern of trading. The study concluded that, in both countries, electricity price volatility was transmitted from the previous trading periods and can be reduced by using financial tool such as future option. Degree of volatility transmission differs in each country, depending upon factors, such as, climate, electricity capacity and number of trader in the market. Applying the Nordic trading pattern form (one hour timeslot) to Thailand electricity market will induce less volatility than using English trading pattern (haft-an-hour timeslot).
