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Network Unbundling and Flawed Coordination: Experience from the Electricity Sector

Author

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  • Gert Brunekreeft

Abstract

What is a good balance between competition and coordination? On the upside, unbundling in network industries promotes competition, but this should be balanced against the downside of unbundling, that is, the cost of coordination. Firm-internal coordination falls away and must be replaced by external market mechanisms. This is a non-trivial task. The cost of flawed coordination resulting from frag- mentation can be substantial and policy should focus more on market mechanisms and governance structures to secure better coordination. This paper examines the problem of coordination and discusses with real-world examples why the market faces difficulty in providing effective coordination.

Suggested Citation

  • Gert Brunekreeft, 2014. "Network Unbundling and Flawed Coordination: Experience from the Electricity Sector," Bremen Energy Working Papers 0015, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0015
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    Cited by:

    1. Gert Brunekreeft & Mika Goto & Roland Meyer & Masahiro Maruyama & Toru Hattori, 2014. "Unbundling of Electricity Transmission System Operators in Germany – An Experience Report," Bremen Energy Working Papers 0016, Bremen Energy Research.

    More about this item

    Keywords

    electricity; railways; unbundling; regulation; competition policy;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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