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Introducing Competition in the French Electricity Supply Industry: The Destabilisation of a Public Hierarchy in an Open Institutional Environment

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  • Finon, D.

Abstract

The French electricity supply industry is characterized by a vertically integrated monopoly and public ownership and when the government introduced market rules, it was with the aim of preserving the integration of the public incumbent as a national champion. This had two paradoxical effects in favour of competition development and the building of safeguards for entrants: 1/ the creation of a credible regulatory governance structure with effective power of control on network access which promoted market-rules, and the creation of a power exchange for balancing the incumbent’s dominant position; 2/ the credibility of the regulatory framework by the self-control of the incumbent in the use of its dominant position and on the capture of the regulator. These two effects result from the influence of the European institutional environment, in particular the intensive scrutiny of the European Commission, which is superposed on the national one.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0314.

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Length: 22
Date of creation: Feb 2003
Date of revision:
Handle: RePEc:cam:camdae:0314

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Keywords: regulation; electricity;

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  1. Brunekreeft, Gert & Keller, Katja, 2000. "The electricity supply industry in Germany: market power or power of the market?," Utilities Policy, Elsevier, vol. 9(1), pages 15-29, March.
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Cited by:
  1. Glachant, J-M. & Finon, D., 2005. "A Competitive Fringe in the Shadow of a State Owned Incumbent: The Case of France," Cambridge Working Papers in Economics 0524, Faculty of Economics, University of Cambridge.
  2. Adrien de Hauteclocque & Yannick Perez, 2011. "Law & Economics Perspectives on Electricity Regulation," RSCAS Working Papers 2011/21, European University Institute.

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