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Ownership Unbundling in Electricity Distribution: Empirical Evidence from New Zealand

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  • Paul Nillesen

    ()

  • Michael Pollitt

    ()

Abstract

New Zealand is the only country to date to have implemented forced ownership unbundling of electricity distribution from the rest of the electricity supply industry (in 1998). This paper examines the impact of this policy on electricity prices, quality of service and costs. We find that ownership unbundling did not achieve its objectives of facilitating greater competition in the electricity supply industry but that it did lead to lower costs and higher quality of service. We suggest that this experience indicates the potential benefits of ownership unbundling in Europe but also the danger of un-intended consequences.

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Bibliographic Info

Article provided by Springer in its journal Review of Industrial Organization.

Volume (Year): 38 (2011)
Issue (Month): 1 (January)
Pages: 61-93

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Handle: RePEc:kap:revind:v:38:y:2011:i:1:p:61-93

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Web page: http://www.springerlink.com/link.asp?id=100336

Related research

Keywords: Electricity distribution; Ownership unbundling; New Zealand; Vertical disintegration; L94;

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Citations

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Cited by:
  1. Erdogdu, Erkan, 2010. "Electricity Market Reform: Lessons for developing countries," MPRA Paper 27317, University Library of Munich, Germany.
  2. Rabindra Nepal & John Foster & Antonio Carvalho, 2014. "Revisiting Electricity Liberalization and Security of Supply: Empirical Evidence," Energy Economics and Management Group Working Papers 7-2014, School of Economics, University of Queensland, Australia.
  3. Pollitt, Michael, 2010. "Does electricity (and heat) network regulation have anything to learn from fixed line telecoms regulation?," Energy Policy, Elsevier, vol. 38(3), pages 1360-1371, March.
  4. Roland Meyer, 2012. "Economies of scope in electricity supply and the costs of vertical separation for different unbundling scenarios," Journal of Regulatory Economics, Springer, vol. 42(1), pages 95-114, August.
  5. de Nooij, Michiel & Baarsma, Barbara, 2009. "Divorce comes at a price: An ex ante welfare analysis of ownership unbundling of the distribution and commercial companies in the Dutch energy sector," Energy Policy, Elsevier, vol. 37(12), pages 5449-5458, December.
  6. Szablewski, Andrzej T., 2011. "The need for revaluation of the model structure for electricity liberalization," MPRA Paper 34898, University Library of Munich, Germany.
  7. Nikogosian, Vigen & Veith, Tobias, 2011. "Vertical integration, separation and non-price discrimination: An empirical analysis of German electricity markets for residential customers," ZEW Discussion Papers 11-069, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
  9. Filippini, Massimo & Wetzel, Heike, 2013. "The Impact of Ownership Unbundling on Cost Efficiency: Empirical Evidence from the New Zealand Electricity Distribution Sector," EWI Working Papers, Energiewirtschaftliches Institut an der Universitaet zu Koeln 2013-6, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  10. Schober, Dominik, 2013. "Static vs. dynamic impacts of unbundling: Electricity markets in South America," ZEW Discussion Papers 13-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Daisy Shen & Qing Yang, . "Electricity Market Regulatory Reform and Competition – Case Study of the New Zealand Electricity Market," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

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