Effects of an accelerated liberalization. Consequences of accelerated liberalization for the competitiveness of Dutch energy companies

One of the conclusions of the Dutch Energy Report, published at the end of 1999, was that it would be feasible to speed up the pace of liberalization in the Netherlands. This conclusion will lead to the liberalization of the retail customers in 2004 and the market for renewable energy in 2001. This will be an incentive to more competition and put a greater pressure on energy companies to concentrate in order to benefit from economies of scale. Less preparation time implies also that there will be less layers of isolation against cost leaders and hence a more intense (price-based) competition. The central question in this report is whether and to what extent the effects of policy, in particular the accelerated liberalization, affect the strategic behavior and competitiveness of the Dutch Regional Electricity Companies (RECs). To address this question four face-to-face interviews have been held with experts from the four major RECs. In these interviews the experts gave their opinion about the Dutch policy regarding the accelerated liberalization and the rate and extent of the privatization. Subsequently, their perspective on the impact of the policy on their competitiveness and their analysis of the Dutch energy market was recorded. After that, the experts exposed their outlook on the future energy market and the ambition and most likely direction of their companies. The data collection was complemented with numerous relevant public interviews of experts derived from various newspapers and energy magazines. The data thus collected were analyzed by means of a theoretical framework consisting of the insights of Porter, Prahalad and Hamel and at a more detailed level marketing theories regarding positioning and branding. This resulted in an overview of the current market position of the Dutch RECs and an outlook for the years to come. 27 refs