Towards a Single Energy Market
Edited by Jean-Michel Glachant and François Lévêque
Chapter 3: Addressing Market Power and Industry Restructuring
Lars Bergman1 INTRODUCTION The basic rationale for European electricity market reform is the consumer beneﬁts it can bring. These beneﬁts may come in many forms. One is lower prices resulting from lower price–cost margins and more cost-eﬃcient production and distribution of electricity.2 Another is a high degree of security of supply, in the short term as well as in the long term. A third type of beneﬁt is environmental eﬃciency, that is, an environmentally friendly electricity supply system. A fourth type is sustainability, that is, an electricity supply system that in the long term does not critically depend on exhaustible natural resources. In this chapter we are primarily concerned with consumer beneﬁts in the form of lower price–cost margins and a more eﬃcient electricity supply industry. The electricity supply industry can be organized and managed in several diﬀerent ways. In the past, vertical integration and central planning were the key features of the typical organization of a European country’s electricity supply industry. The EU electricity market directives, however, have induced a fundamental reorganization of the industry and major steps away from the central planning regime. Thus, in the emerging new era, competition, made possible and facilitated by unbundling and market integration, is expected to be the main driver to attain eﬃciency in electricity supply.3 However, in a system where competition is expected to play such a signiﬁcant role, competition clearly has to be at least ‘workable’. By ‘workable...
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.