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Competition in Electricity Markets

Competition in Electricity Markets

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Published by: Tatiana Belanga Chicareli on May 02, 2011
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06/17/2013

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Electricity market reform is a moving target.One key development
is the market itself.The ESI is rapidly expanding its boundaries.
Generation is increasingly integrated with gas and oil companies.
At the same time,distribution and end user supply activities in
network industries,such as gas,electricity,telecommunications or
water,are likely to become more integrated across industries.The
geographical boundaries of the ESI,once coincident with national
or state boundaries,are also changing.More and more,electricity
systems are becoming integrated within regional markets.
Liberalisation is also opening the way for significant direct
investment by foreign companies in national markets.The
implication for policy of this expanding industry boundary is that
regulation will have to be managed at a multi-sectoral and
multinational level.This evolution towards greater dependence on
competition law and common rules for international trade is a

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introduction and executive summary

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process that has already occurred in many other industries opened
to competition.

The emergence of non-centralised dispatch is also changing the
ESI.Autoproduction and distributed generation are rapidly
growing in many countries due to the development of efficient
small scale generation.Environmentally these developments are
very positive to the extent that they make use of renewable
sources of energy.Distributed generation and autoproduction are
both substitutes for electricity transportation services.This has the
effect of weakening the effectiveness of natural monopoly
regulation of the network.In due course,if new generation
technologies become a profitable substitute for transportation,
transportation will cease to be a natural monopoly.Such a
development would have a crucial impact on the future economics,
market structure and regulation of the ESI.

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introduction and executive summary ===

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