Several hurdles remain to further liberalization and full competition in the electricity sector.
Fortnightly Magazine - February 2005
Two major trends can be observed in Europe’s electricity sector. First, the increasing importance of private-sector participation in a sector that was traditionally viewed as belonging to the state. The second major trend in Europe is that of the massive amount of merger and acquisition activity across the continent. At the same time, several hurdles remain to further liberalization and full competition in the European electricity sector.
An analysis of competitive power markets finds that oligopolies are the end game for liberalized power markets.
The British wholesale power market is about to enter a new phase. Having enjoyed a long period of surplus capacity, the combination of the forced retirement of some nuclear plant and continued demand growth is likely to lead to a capacity shortage within the next three to four years, and it is by no means clear whether the market, as it currently operates, will be able to maintain secure supplies.
What happens when economists and state regulators give up on electric restructuring?
It’s not to be taken lightly when several high-profile economists reverse themselves on electric competition—giving up on policies they had pushed for years. It’s also quite serious when regulators and legislators in pro-competitive states become willing to discuss a repeal of electric restructuring laws. These developments, seen over the fast few months, have set the industry buzzing.