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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.

Suggested Citation

  • Mennel, Tim & Viecens, Maria Fernanda, 2007. "Latin versus European Power: A Tale of Two Market Reforms," ZEW Discussion Papers 07-080, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7004
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    References listed on IDEAS

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    1. M. Pollitt, 2004. "Electricity reform in Chile. Lessons for developing countries," Competition and Regulation in Network Industries, Intersentia, vol. 5(3), pages 221-263, September.
    2. Geller, Howard & Jannuzzi, Gilberto de Martino & Schaeffer, Roberto & Tolmasquim, Mauricio Tiomno, 1998. "The efficient use of electricity in Brazil: progress and opportunities," Energy Policy, Elsevier, vol. 26(11), pages 859-872, September.
    3. Tooraj Jamasb and Michael Pollitt, 2005. "Electricity Market Reform in the European Union: Review of Progress toward Liberalization & Integration," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 11-42.
    4. Tooraj Jamasb & Michael Pollitt, 2006. "Electricity Market Liberalisation and Integration in the European Union," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(02), pages 16-23, July.
    5. Glanchant, J-M. & FLévêque, F., 2006. "Electricity Internal Market in the European Union: What to do next?," Cambridge Working Papers in Economics 0623, Faculty of Economics, University of Cambridge.
    6. repec:ces:ifodic:v:4:y:2006:i:2:p:14567500 is not listed on IDEAS
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    Cited by:

    1. William Yu & Michael G. Pollitt, 2009. "Does Liberalisation cause more electricity blackouts? Evidence from a global study of newspaper reports," Working Papers EPRG 0902, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

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