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Ownership Unbundling of Gas Transmission Networks - Empirical Evidence

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  • Growitsch, Christian

    ()
    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Stronzik, Marcus

    ()
    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

Abstract

The European Commission has intensively discussed the mandatory separation of natural gas transmission from production and services. However, economic theory is ambiguous on the price effects of vertical separation. In this paper, we empirically analyse the effect of ownership unbundling of gas transmission networks as the strongest form of vertical separation on the level of end-user prices. Therefore, we apply different dynamic estimators as system GMM and the bias-corrected least-squares dummy variable or LSDVC estimator on an unbalanced panel out of 18 EU countries over 19 years, allowing us to avoid the endogeneity problem and to estimate the long-run effects of regulation. We introduce a set of regulatory indicators as market entry regulation, ownership structure, vertical separation and market structure and account for structural and economic country specifics. Among these different estimators, we consistently find that ownership unbundling has no impact on natural gas end-user prices, while the more modest legal unbundling reduces them significantly. Furthermore, third-party access, market structure and privatisation show significant influence with the latter leading to higher price levels.

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Bibliographic Info

Paper provided by Energiewirtschaftliches Institut an der Universitaet zu Koeln in its series EWI Working Papers with number 2011-7.

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Length: 21 pages
Date of creation: 20 Jul 2011
Date of revision:
Handle: RePEc:ris:ewikln:2011_007

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Keywords: Natural gas; Networks; Regulation; Ownership unbundling; Panel data;

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References

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Citations

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Cited by:
  1. Testa, Federico & Stagnaro, Carlo, 2011. "Reti di trasporto nazionale e concorrenza nei mercati del gas: il caso Eni-Snam Rete Gas
    [Networks and competition in natural gas markets: the case of Eni-Snam Rete Gas]
    ," MPRA Paper 48698, University Library of Munich, Germany.
  2. Isabel Soares & Paula Sarmento, 2012. "Unbundling in the Telecommunications and the Electricity Sectors: How Far should it Go?," European Research Studies Journal, European Research Studies Journal, vol. 0(Special I), pages 157-194.
  3. Tsatsos, Aristidis, 2012. "Die Liberalisierung des russischen Gassektors: 3 Szenarios?
    [The liberalisation of the Russian gas sector: 3 scenarios?]
    ," MPRA Paper 44623, University Library of Munich, Germany.

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