Towards a Single Energy Market
Edited by Jean-Michel Glachant and François Lévêque
Richard Green, Arturo Lorenzoni, Yannick Pérez and Michael Pollitt1 INTRODUCTION The aim of this research project has been to identify good and bad practices aﬀecting the electricity industry in the EU. Benchmarking is one way in which we can make comparisons across countries, and can contribute to that task. The European Commission has already begun this process, publishing four benchmarking reports over the past three years, in 2001, 2003, 2004 and 2005. The key to benchmarking is collecting comparable data from each country, and using it to infer how well that country is performing. Three points immediately come to mind. First, it is important to collect information that actually sheds light upon the industry’s performance, rather than gathering data simply because it is available. Second, some types of data give useful information about the industry’s performance, but cannot be used in themselves as indicators of good or bad practice. For example, population density in a country is important in explaining the level of transmission and distribution costs, but a country cannot be accused of good or bad practice on the basis of its population density! Third, even when the data is suitable to indicate how well an industry is likely to be performing, there may be exceptions, and so each case should always be the subject of further interpretation before ﬁnal judgments are made. Benchmarks should be seen as signals rather than deﬁnitive indicators. The right choice of benchmarks, however, can minimize the number of times that...
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