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Latin versus European Power: A Tale of Two Market Reforms

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  • Mennel, Tim
  • Viecens, Maria Fernanda

Abstract

This paper compares electricity market reforms in the European Union with reforms in Chile and Brazil. The paradigm of competitive market structures for the electricity sector, as developed in the economics literature, is outlined: competitive markets in generation and retailing and an independent regulator of the natural monopoly in transmission and generation. We present the institutional framework as well as the development of electricity markets in the European Union, Chile and Brazil and discuss in how far they comply with the textbook paradigm. Considerable differences emerge: While the European Union follows a path of full liberalization, facing, however, great difficulties in achieving unbundling of vertically integrated electricity companies and transnational competition, Chile and Brazil have only partially liberalized their electricity sector, enacting regulation to ensure household consumer protection and security of supply. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-080.

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Date of creation: 2007
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Handle: RePEc:zbw:zewdip:7004

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Cited by:
  1. Yu, W. & Pollitt, M.G., 2009. "Does Liberalisation cause more Electricity Blackouts? Evidence from a Global Study of Newspaper Reports," Cambridge Working Papers in Economics 0911, Faculty of Economics, University of Cambridge.

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