The relationship between regulation and competition policy for network utilities

Should regulation of potentially competitive elements of network utilities be left with sector regulators or solely subject to normal competition laws? Britain evolved licenses for network activities overseen by regulators while the EU places more emphasis on making sector regulation consistent with competition law. The paper discusses the appropriateness of the competition law approach for telecoms and electricity. Post-modern utilities like telecoms, in which facilities-based competition is possible, lend themselves to the approach laid out in the Communications Directives, and its application to mobile call termination is discussed. Electricity, where collective dominance is more likely, does not fit comfortably into this approach. Instead, licence conditions retain advantages where it may be necessary to modify market rules in a timely and well-informed manner, as exemplified by the English Electricity Pool

Lost in Translation: Interpreting the Brazilian Electric Power Privatisation Failure.

Did Latin American privatisation polices fail because of flawed implementation of fundamentally sound policies or because privatisation policies were themselves seriously flawed?Using the Brazilian electric power reforms as a narrative tool, this paper examines the causal chain assumed by large-scale privatisation policies implemented as part of structural reformand adjustment programmes. The paper concludes that many privatisation policies and the economic stabilisation programmes within which they were embedded were not mutually reinforcingas policymakers had expected and that in their application, much of what privatisation theories claimed was lost in translation.Brazil;privatisation;infrastructure;electric power

Competition in Electricity Spot Markets: Economic Theory and International Experience

auctions, electricity markets

Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households

This paper explores the effects of a tax levied on Spanish energy-related CO2 emissions. After justifying the relevance of carbon taxation in the Spanish context, we consider the introduction of a product (fossil-fuel) tax with a rate obtained through the ‘actual damage cost’ method. Our empirical analysis proceeds in two stages. First, we employ an input-output demand model to calculate the price changes after the introduction of carbon taxation. In a second stage, simulation with Spanish household micro-data for 1994 yields the environmental and economic effects of a Spanish carbon tax. We find a limited short-run reaction to the carbon tax, which hampers its environmental success. The carbon tax burden is, however, significant, with a proportional distribution across households.

Utility privatization and the needs of the poor in Latin America - Have we learned enough to get it right?

Efforts to reform utilities can affect poor households in varied, often complex, ways, but it is by no means certain that such reform will hurt vulnerable households. Many myths have been perpetuated in discussions of utility reform - and in many cases poor households have benefited from reform. What is amazing is the extent to which governments, and their advisors - sometimes including multilateral organizations - fail to measure, anticipate, and monitor how the privatization of utilities actually affects the poor. Many questions must still be answered before good general guidelines can be drawn, but the authors offer many suggestions about how social, regulatory, and privatization policy, can increase the benefits of utility reform for poor households. The good news is that many measures can be taken to improve the chances that poor households will benefit from reform. Chief among these is promoting competition, where possible. Essentially what is needed is political commitment to doing the right thing. If policy is weak before privatization, it is going to be weak after privatization as well. Privatization is no substitute for responsible policy on redistribution.Environmental Economics&Policies,Trade Finance and Investment,Municipal Financial Management,Decentralization,Banks&Banking Reform,Environmental Economics&Policies,Banks&Banking Reform,Public Sector Economics&Finance,Town Water Supply and Sanitation,Municipal Financial Management

Energy Access Scenarios to 2030 for the Power Sector in Sub-Saharan Africa

In order to reach a goal of universal access to modern energy services in Africa by 2030, consideration of various electricity sector pathways is required to help inform policy-makers and investors, and help guide power system design. To that end, and building on existing tools and analysis, we present several ‘high-level’, transparent, and economy-wide scenarios for the sub-Saharan African power sector to 2030. We construct these simple scenarios against the backdrop of historical trends and various interpretations of universal access. They are designed to provide the international community with an indication of the overall scale of the effort required. We find that most existing projections, using typical long-term forecasting methods for power planning, show roughly a threefold increase in installed generation capacity occurring by 2030, but more than a tenfold increase would likely be required to provide for full access – even at relatively modest levels of electricity consumption. This equates to approximately a 13% average annual growth rate, compared to a historical one (in the last two decades) of 1.7%.Energy Access, Power System Planning, Sub-Saharan Africa

An Agent Based Simulation of Smart Metering Technology Adoption

Based on the classic behavioural theory “the Theory of Planned Behaviour”, we develop an agent-based model to simulate the diffusion of smart metering technology in the electricity market. We simulate the emergent adoption of smart metering technology under different management strategies and economic regulations. Our research results show that in terms of boosting the take-off of smart meters in the electricity market, choosing the initial users on a random and geographically dispersed basis and encouraging meter competition between energy suppliers can be two very effective strategies. We also observe an “S-curve” diffusion of smart metering technology and a “lock-in” effect in the model. The research results provide us with insights as to effective policies and strategies for the roll-out of smart metering technology in the electricity market