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The Liberalisation of the Energy Sector in the European Union


Author Info

  • Guido Pepermans

    (K.U.Leuven, C.E.S., Energy, Transport and Environment
    K.U.Leuven, Energy Institute)

  • Stef Proost

    (K.U.Leuven, C.E.S., Energy, Transport and Environment)


The energy sector covers the coal, oil, gas and electricity sector. The European coal and oil sector have already been liberalised in the past. The current debate concerns mainly the electricity and the gas sector. In this paper we will concentrate on the electricity sector for three reasons. First, the sector is more important in terms of value added, secondly it is considered to be more complex and, finally, the opening of the electricity market precedes that of the gas market. Obviously, this does not mean that the gas sector should not be studied as there are many challenges left. In section II, we discuss the institutional background for the liberalisation. Section III then analyses the British experience. This is of interest because the UK has liberalised its market about 10 years ago and this experience has been the subject of extensive economic research. In the sections IV to VII, we focus on the four main problems in the liberalisation of the European electricity market: the stranded costs issue, the cross-subsidies issue, the pricing of transmission and the regulation of the environment. Finally, section VIII concludes.

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Bibliographic Info

Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0003.

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Length: 29 pages
Date of creation: Nov 2000
Date of revision:
Handle: RePEc:ete:etewps:ete0003

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Cited by:
  1. Constanza Fosco Perea Muñoz & Eduardo Saavedra, . "Mercados de Gas Natual: Análisis Comparado de la Experiencia Internacional," ILADES-Georgetown University Working Papers inv150, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  2. Christian Huveneers, 2005. "Working Paper 09-05 - Réforme du marché de l’électricité en Belgique. Leçons de l’Espagne, de l’Allemagne et de la Grande-Bretagne," Working Papers 0509, Federal Planning Bureau, Belgium.


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