Skip to main content
Article thumbnail
Location of Repository

Issues and Options for Restructuring Electricity Supply Industries

By David Newbery


The electricity supply industry is highly capital-intensive, whose success depends critically upon the management of its investment. In most developing countries investment is poorly managed, poorly maintained, and often inadequate. Inadequate regulation or political control lead to low prices that undermine the finance of investment and give poor incentives for management and operation. The paper argues that regulation must be carefully designed to provide efficient incentives and adequate guarantees to sustain investment and operations and only then will privatisation improve performance and benefit consumers. The paper discusses the evidence for these claims, the circumstances required for full unbundling and liberalisation to be successful, and those where the Single Buyer Model or continued, ideally reformed, state ownership, may be preferable, at least until conditions improve

Topics: Classification-JEL: K23, L51, L94, Electricity, reform, restructuring, regulation, developing countries
Publisher: Faculty of Economics
Year: 2004
OAI identifier:
Provided by: Apollo

Suggested articles


  1. (1999). A European Market for Electricity? London: Centre for Economic Policy Research,
  2. (2000). An analysis of the
  3. and M.Pollitt (2001) Benchmarking and Regulation: doi
  4. and R.Rao (2000) 'Private Infrastructure: Private Activity Fell by 30% in 1999', Public Policy for the Private Sector, Note number 215, September,
  5. (2001). California's electricity crisis', doi
  6. (1994). CHILGENER', Ch 9, and `ENERSIS',
  7. (1998). Competition in Electricity Supply: will "1998" be worth it?' doi
  8. (2001). Cost-of-Service Rates to Market-Based Rates to Price Caps to ?!#?#!?', The Electricity Journal, doi
  9. (1997). Determining the Regulatory Asset Base for Utility Price Regulation', doi
  10. (2001). Distributed Generation: Reaching the Market Just in Time', The Electricity Journal,
  11. (1996). Electricity Regulation in Argentina, Brazil, Uruguay and Chile', doi
  12. (1999). Energy after the financial crisis,
  13. (2001). Heresy? The Case Against Deregulation of Electricity Generation', The Electricity Journal, doi
  14. (2001). Investment in the Brazilian ESI - What went wrong? What should be done?”, Instituto de Economia da Universidade Federal do Rio de Janeiro.
  15. (1993). Pool Price Statement, Office of Electricity Regulation,
  16. (1997). Privatisation and Liberalisation of Network Utilities', doi
  17. (2000). Privatization, Restructuring and Regulation of Network Utilities, doi
  18. (1993). Reforming the policies for electric power in developing countries’, World Bank, Industry and Energy Department,
  19. (2000). Regulating the Electricity Sector in Latin America" doi
  20. (1996). Regulation, public ownership and privatisation of the English electricity industry', ch 2, 25-81 doi
  21. (1999). Reviews of Public Electricity Suppliers
  22. (2000). State Power Sector Reform - A Review of the Orissa Experience, Draft Final Report, World Bank.
  23. (1994). The dynamic efficiency of regulatory constitutions', doi
  24. (1994). The Organisation and Operation of the Electricity Supply Industry in Argentina, London: Energy Economic Engineering Ltd.
  25. (2001). The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England', doi
  26. (1997). The Restructuring and Privatisation of the CEGB- Was it worth it', doi
  27. (1997). The restructuring and privatization of the Electricity Supply Industry in Northern Ireland - will it be worth it?',
  28. (1998). The restructuring and privatization of the Electricity Supply Industry in Scotland',
  29. (1993). The World Bank's Role in the Electric Power Sector, doi
  30. (1999). Transmission Pricing in Competitive Electricity Systems, a Multi-client Study,
  31. (1994). Welfare Consequences of Selling Public Enterprises: An Empirical Analysis, doi
  32. (1994). World Development Report doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.