Where function follows form: International comparisons of restructured electricity markets

Journal Article · Thu Apr 01 04:00:00 EST 1999 · Electricity Journal

DOI:https://doi.org/10.1016/S1040-6190(99)00015-9· OSTI ID:352494

Sioshansi, F; Morgan, C ^[1]

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1. Convector Consulting NA, Inc., Menlo Park, CA (United States)

It was 10 years ago that the U.K. (more correctly England and Wales) began its famous experiment in electricity market restructuring. Since then restructuring, privatization, and market reform has spread around the world. But despite the large number of countries that have implemented such reforms, or are contemplating doing so in the near future, no two identical or similar systems have emerged. Each has its unique market structure, unique rules of engagement, and unique quirks. Not surprisingly, each also has its own strengths and weaknesses. This despite the fact that there is general agreement on the ultimate goals and objectives of restructuring. In nearly all cases, the ultimate aim is a more competitive system that is more efficient, encourages service quality improvements, and results in lower prices to consumers. As its turns out, there are good reasons for this diversity of design -- and outcome. Hence, an examination of different market structures and their relative performance should be a useful exercise. Moreover, one must admit that the industry is, to a great extent, still experimenting and learning. This suggests that as time goes on and the industry learns from the mistakes of the past, better, more efficient market designs will emerge. This articles has two modest aims: First, to explain the fundamental reasons for the diversity of form and function in different restructured markets, and to examine their relative strengths and weaknesses; and Second, to identify whether a particular market structure is preferable to others, and if so, why.

• OSTI ID: 352494
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 3 Vol. 12; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
COMPETITION
ELECTRIC POWER
MARKET
PLANNING
UNITED KINGDOM