Opening European Electricity and Gas Markets

Wed Nov 15 20:24:38 UTC 2000
By Graham Shuttleworth

In this paper, Mr. Shuttleworth looks at market opening in European electricity and gas markets from an economic point of view, which means from three separate angles.

1. First, he consider whether the move towards competition is being driven simply by the economics of the sector, without the need for specific interventions by governments and regulators.

2. Second, since he answers this first question in the negative, Mr. Shuttleworth will look the measures that governments and regulators need to introduce, if they are serious about introducing competition.

3. Third, Mr. Shuttleworth lists some outstanding issues, i.e. problems that legal and regulatory institutions in European markets have yet to deal with, but which are crucial to achieving the benefits of efficient competition.

Note that the last point refers to "institutions," rather than just to governments and regulators. There is only so much that one can expect of the government agencies responsible for energy sector regulation. As we shall see, some of the outstanding problems may not be solved without the attention of legislatures and/or the judiciary.