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Effects of regulation and economic environment on the electricity industry׳s competitiveness: A study based on OECD countries

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  • Baek, Chulwoo
  • Jung, Euy-Young
  • Lee, Jeong-Dong

Abstract

We propose a competitiveness index for the electricity industry based on efficiency, stability, and growth factors identified from previous studies subject to data accessibility. These are then weighted appropriately through the application of the analytical hierarchy process. This index is an alternative tool to capture the diverse characteristics of the electricity industry in order to analyze performance after deregulation. Using the competitiveness index, we analyze the effect of regulation change in specific economic environments represented by the level of economic development, energy intensity, and manufacturing share, for example. According to the results, deregulation generally increases competitiveness, but the effect depends on the economic environment and the type of regulation. Deregulating entry and vertical integration to increase competitiveness is more effective in countries where the level of economic development, energy intensity, and manufacturing share are low. The manner in which the privatization effect is related to the economic environment is, however, unclear.

Suggested Citation

  • Baek, Chulwoo & Jung, Euy-Young & Lee, Jeong-Dong, 2014. "Effects of regulation and economic environment on the electricity industry׳s competitiveness: A study based on OECD countries," Energy Policy, Elsevier, vol. 72(C), pages 120-128.
  • Handle: RePEc:eee:enepol:v:72:y:2014:i:c:p:120-128
    DOI: 10.1016/j.enpol.2014.04.025
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