Utility Regulation in Competitive Markets

Utility Regulation in Competitive Markets

Problems and Progress

Edited by Colin Robinson

This significant new volume contains incisive chapters on a number of prominent concerns, including changes in the British system of utility regulation, the spectrum allocation question, liberalisation of EU energy markets, security of supply issues, reform in the European postal sector, the future of rail regulation, the cost of capital and Ofcom’s strategic approach to regulation. Chapters on each topic are followed by comments from regulators, competition authority chairmen and other experts in the relevant fields. By confronting the most important international developments in utility regulation, the authors offer practical policy recommendations for an effective way forward.

Chapter 3: European energy liberalisation: progress and problems

Jorge Vasconcelos

Subjects: economics and finance, competition policy, public sector economics


Jorge Vasconcelos INTRODUCTION Energy liberalisation in the European Union was strongly influenced by the UK electricity liberalisation process. On the other hand, UK electricity liberalisation and privatisation, started in 1989, had been preceded by the liberalisation and privatisation of the gas (1986) and telecommunications (1984) industries. Stephen Littlechild and Michael Beesley were among the most influential leaders of regulatory developments arising from the liberalisation and privatisation of the telecommunications and energy industries in the UK. Chairing the Portuguese energy regulatory authority, which I helped set up in 1996, as well as the Council of European Energy Regulators (CEER), which I co-founded with some other colleagues in 2000, I felt obliged to trace this path of affiliation for two reasons: ● ● first, to highlight the logical and historical nexus between the subject of this chapter and its patron; and second, to emphasise the debt of the European regulatory community towards the UK pioneers of the 1980s. The UK experience of electricity liberalisation was one of the major sources of inspiration for the political decision makers who launched the European internal energy market.1 It provided the necessary initial momentum and one of the most influential paradigms shaping energy restructuring in Europe. However, later on this process got its own dynamics and, inevitably, the shortcomings of a model designed for a selfsufficient island became apparent. New solutions better suited for a large, interconnected and energy-dependent continental system were designed and implemented. Subsequently, these new EU rules influenced the...

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