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Energy R&D in private and state-owned utilities: an analysis of the major world electric companies

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  • Alessandro STERLACCHINI

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Abstract

The last two decades have witnessed a staggering decline of R&D investment in the fields of energy and electricity. This paper contends that this widespread phenomenon is mainly ascribable to the processes of liberalisation and privatisation of electricity markets which have induced electric utilities to dramatically reduce R&D expenditures. A closer inspection to recent data concerned with ten major electric companies of the world shows that the drop of research expenditures was particularly strong among the private or newly-privatised companies. Instead, those that remained under public control did not reduce R&D efforts and such a choice was not at odds with the goal of increasing company profits. According to these findings and to the widely recognised need of a surge of energy R&D, radical policy measures seem necessary. Along with an R&D obligation for private electric utilities, also an extension of public ownership or the introduction of public-private partnerships should be seriously taken into account.

Suggested Citation

  • Alessandro STERLACCHINI, 2010. "Energy R&D in private and state-owned utilities: an analysis of the major world electric companies," Departmental Working Papers 2010-29, Department of Economics, Management and Quantitative Methods at Universit√† degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2010-29
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    File URL: http://wp.demm.unimi.it/files/wp/2010/DEMM-2010_029wp.pdf
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    References listed on IDEAS

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    1. Paroma Sanyal, 2007. "The effect of deregulation on environmental research by electric utilities," Journal of Regulatory Economics, Springer, vol. 31(3), pages 335-353, June.
    2. Dooley, J J, 1998. "Unintended consequences: energy R&D in a deregulated energy market," Energy Policy, Elsevier, vol. 26(7), pages 547-555, June.
    3. Calderini, Mario & Garrone, Paola, 2001. "Liberalisation, industry turmoil and the balance of R&D activities," Information Economics and Policy, Elsevier, vol. 13(2), pages 199-230, June.
    4. Nemet, Gregory F. & Kammen, Daniel M., 2007. "U.S. energy research and development: Declining investment, increasing need, and the feasibility of expansion," Energy Policy, Elsevier, vol. 35(1), pages 746-755, January.
    5. Luc BERNIER & Louis SIMARD, 2007. "The Governance Of Public Enterprises: The Quebec Experience," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(3), pages 455-474, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Energy R&D; Electric utilities; Public and private enterprises;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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