Equal access to the energy infrastructure as a precondition to promote competition in the energy market. The case of European Union
In many EU countries, the infrastructures for supplying electricity and gas (electricity networks, gas pipelines, and storage facilities) are still properties of the so-called vertically integrated undertakings (VIU) responsible for the extraction or generation, supply, and transmission and distribution of the energy. While competition can be promoted in the generation/production and supply side of the vertical integration, transmission and distribution segments remain natural monopolies that hinder market mechanisms. Vertical integration simply raises the possibility for incumbents to favor their own divisions and to block new entrants. As a result, non-discriminatory and equal access to the electricity and gas transmission and distribution networks, also LNG and storage facilities, is crucial to foster competition in politically delicate structures of the electricity and gas markets.
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- Newbery, D., 2004.
"Electricity Liberalisation in Britain: the quest for a satisfactory wholesale market design,"
Cambridge Working Papers in Economics
0469, Faculty of Economics, University of Cambridge.
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