The Liberalization of Infrastructure
- Elgar original reference
Edited by Matthias Finger and Rolf W. Künneke
10 The liberalization of electricity markets1 Jean-Michel Glachant and Yannick Perez INTRODUCTION The competitive reform of electricity industries has recently experienced a wide expansion worldwide, with over 200 new instances of sectoral deregulation between 1990 and 2008 (Newbery, 2000; Glachant and Finon, 2003; World Bank, 2006; Sioshansi and Pfaffenberger, 2006; Glachant and Lévêque, 2009). Nonetheless, subsequent to the California electricity crisis (2000 – 2001), there has been an increasing dissatisfaction with regards to the limitations, and in some cases the failures, of these new ways of framing electricity industries (Kessides, 2004; Joskow, 2006b). We are witnessing a slowdown or, in some cases, a blocking of the reforms, as if the progression of competition policy in electricity industries had a cyclical component. Previously, the unique characteristics of electricity industries appeared to set them apart from most other industries, deemed ‘competitive’. These electricity industries notably feature: significant economies of scale or scope (extending to natural monopolies); far-reaching externalities (positive or negative) in production or consumption; and extensive vertical and horizontal integration (either under a single corporate umbrella or in the form of long-term ad hoc contracts (Brousseau and Glachant, 2002, 2008)). Within this very specific framework, the successful introduction of competitive mechanisms, substituting for administered regulation or internal corporate management hierarchies, along with the creation of open markets either upstream or downstream of the formerly integrated networks, created both disruptions and innovations in equal measure (Joskow and Schmalensee, 1983; Baumol and Sidak, 1994). The purpose of this chapter is to present,...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.