Electricity supply industry. Structure, ownership and regulation in OECD countries

This study surveys developments and implications in the electricity supply industries in OECD countries. Chapter 1 introduces the issues. (Competition or electricity supply for everybody?) Electricity markets are dynamic and the participants are restructuring and repositioning themselves in order to benefit from new opportunities or policy initiatives. These changes are described in chapter 2. Privatisation is being pursued by some governments, not only for reasons of economic efficiency. Arguments for and against privatisation and different ways of introducing it are discussed in chapter 3. Fair trade and competition legislation, as it applies to all corporate entities, creates the institutional framework within which the utility has to operate. Various approaches to regulation and recent developments are described in chapter 4; the implications of regulatory changes are analysed in chapter 5. Having surveyed recent developments and their direct consequences, this study then goes on to look at their broader implications for the achievement of a range of energy policy objectives. Chapter 6 looks at fuel choice and investment decisions. Chapter 7 considers the issue of security of electricity supply, which has many special characteristics for both suppliers and regulators. OECD countries use different approaches for ensuring security of supply. Chapter 8 looks at environmental protection. Chapter 9 looks at energy efficiency. Chapter 10 discusses pricing. The introduction of competition has significant effects: it tends to reduce costs, remove cross subsidies, and bring prices more closely in line with the structure of costs. But there is no clear evidence at this stage as to whether, in the long run, competition produces lower overall prices. Finally chapter 11 analyses risk. The electricity business, like every other business, is faced with a variety of risks that cover every financial and technical facet of electricity production, transport, and supply. (N.C.)