Retail competition in electricity markets

Summary : The introduction of competition into retail electricity supply gave rise to great expectations. However, to date its performance has proven less than stellar, owing primarily to the theoretical concepts underpinning this reform, which draw heavily on the Austrian school. Neither consumers’ decision processes nor this sector’s technical paradigm were adequately accounted for, leading to an overestimation of the expected impact of opening to competition. Short- and medium-term prospects for the evolution of retail markets must be reconsidered from the perspective of greater stability : not a generalization of competition, but rather a persistent segmentation between active and inactive clients ; and little room for radical innovations with the potential for undermining the incumbents’ positions.

This entry was posted in Working Paper. Bookmark the permalink.

Comments are closed.