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ECN publication
Title:
Market metaphors and electricity sector restructuring: lessons for developing countries
 
Author(s):
 
Published by: Publication date:
ECN Policy Studies 1997
 
ECN report number: Document type:
ECN-RX--97-050 Article (scientific)
 
Number of pages:
18  

Published in: Presented at the 20th annual international conference of the International Association of Energy Economics, New Delhi, 22-24 Jan (), , , Vol., p.-.

Abstract:
The drive towards market conformity and requirements of sustainabilityput dual pressure on energy policy makers. It is by no means unquestionable whether the market instrument will painlessly and automatically further the goals of sustainability. The on-going restructuring of the electricity sector in many industrialized countries bears testimony to the uneasy alliance between market concepts and sustainability objectives. The purpose of this paper is to evaluate the experience in industrialized countries critically with a view to potential pitfalls and opportunities for developing countries, who are considering reforms. We will do so by first examining what economists actually imply when they use the metaphor of the market. The divergent interpretations of the neoclassical, evolutionary and institutional schools will be illustrated in terms of consequences for the structure and behaviour of electricity markets. The muddled nature of the motivations for, and expectations of, recent changes in the electricity sector will thus become apparent. Next we will summarily describe the crucial differences between the electricity supply situation in industrialized and developing nations and the dangers of indiscriminate transfer of market structures and regulatory approaches. Finally we conclude, that electricity sector restructuring in developing nations is of utmost importance, but that the experience from industrialized nations provides circumstantial evidence rather than clear lessons for reform-minded energy policy makers in developing countries.


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