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Competition in European Electricity Markets

Competition in European Electricity Markets

A Cross-country Comparison

Edited by Jean-Michael Glachant and Dominique Finon

This book focuses on the diversity of electricity reforms in Western Europe, drawing evidence from ten European Union memberstates plus Norway and Switzerland as associate members. The contributors analyse the various ways of introducing competition in the European electricity industries, and consider both the strategies of electricity companies and their behaviour in electricity marketplaces. They also offer an explanation of the differences of reforms by the institutions and the industrial structures of each country which shape the types of marketrules, industrial restructuring and public service regulations which have been adopted.

Chapter 13: Institutional and Organizational Reform in the Italian Electricity Supply Industry: Reconciling Competition with the Single Tariff

Arturo Lorenzoni

Subjects: economics and finance, competition policy, energy economics, industrial organisation


13. Institutional and organizational reform in the Italian electricity supply industry: reconciling competition with the single tariff Arturo Lorenzoni INTRODUCTION The aim of this contribution is to describe in brief the recent history of the electricity industry in Italy, looking at its regulation and the trends towards liberalization and privatization of the incumbent utility that has operated since the industry was nationalized in 1962. In 1995 regulation of the industry passed from a political to an independent authority, and the question of how the sector should now be structured, in the light of the implementation of EU Directive 96/92/EC, was the subject of intense debate. Two leading schools of thought were opposed; one supported full deregulation of the market, with a radical change of the integrated monopolist structure, while the other wanted to introduce the minimal changes required for implementing the directive. The decision taken in March 2001 to open virtually all the non-domestic market from 2004 onwards, and the new structural organization of the electricity industry seems to indicate that full deregulation has been affirmed. Nevertheless, it is not yet clear whether the new system will be able to fulfil the dominant role of ENEL and leave room for real competition. THE REGULATION OF THE INDUSTRY A Historical Overview The birth of the Italian electricity industry really occurred in 1883, when the Edison Company of Milan constructed a system for illuminating the La Scala Theatre and a number of nearby buildings. Private firms developed first, but in...

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