IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v36y2011i5p3282-3292.html
   My bibliography  Save this article

Regulation, efficiency and equilibrium: A general equilibrium analysis of liberalization in the Turkish electricity market

Author

Listed:
  • Akkemik, K. Ali
  • Oğuz, Fuat

Abstract

Turkish electricity sector has been undergoing significant regulatory reforms since 2001 and competition was introduced to some extent. This paper examines potential impacts of full liberalization on efficiency and competition in the electricity market using an applied computable general equilibrium (CGE) model and a counter-factual simulation. Simulation results imply enhanced efficiency in the electricity sector, reduced household energy prices, and gains in output and welfare by 0.5–1.1 percent of GDP. The paper also explains possible factors that lead to differences between estimated effects and actual results. With changing institutional background and legal framework, political pressures tend to dominate efficiency gains.

Suggested Citation

  • Akkemik, K. Ali & Oğuz, Fuat, 2011. "Regulation, efficiency and equilibrium: A general equilibrium analysis of liberalization in the Turkish electricity market," Energy, Elsevier, vol. 36(5), pages 3282-3292.
    • Handle: RePEc:eee:energy:v:36:y:2011:i:5:p:3282-3292
    DOI: 10.1016/j.energy.2011.03.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544211001903
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2011.03.024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Telli, Çagatay & Voyvoda, Ebru & Yeldan, Erinç, 2008. "Economics of environmental policy in Turkey: A general equilibrium investigation of the economic evaluation of sectoral emission reduction policies for climate change," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 321-340.
    2. Yin-Fang Zhang & David Parker & Colin Kirkpatrick, 2008. "Electricity sector reform in developing countries: an econometric assessment of the effects of privatization, competition and regulation," Journal of Regulatory Economics, Springer, vol. 33(2), pages 159-178, April.
    3. Estache, Antonio & Gonzalez, Marianela & Trujillo, Lourdes, 2002. "Efficiency Gains from Port Reform and the Potential for Yardstick Competition: Lessons from Mexico," World Development, Elsevier, vol. 30(4), pages 545-560, April.
    4. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1997. "Winners and losers from utility privatization in Argentina : lessons from a general equilibrium model," Policy Research Working Paper Series 1824, The World Bank.
    5. Dorothée Boccanfuso & Antonio Estache & Luc Savard, 2009. "Electricity Reforms In Mali: A Macro–Micro Analysis Of The Effects On Poverty And Distribution," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 127-147, March.
    6. Bagdadioglu, Necmiddin & Waddams Price, Catherine M. & Weyman-Jones, Thomas G., 1996. "Efficiency and ownership in electricity distribution: A non-parametric model of the Turkish experience," Energy Economics, Elsevier, vol. 18(1-2), pages 1-23, April.
    7. James N. Blignaut & Jan H. van Heerden & Margaret Chitiga-Mabugu & Philip D. Adams & Reyno Seymore, 2009. "The impact of an electricity generation tax on the South African economy," Working Papers 139, Economic Research Southern Africa.
    8. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
    9. Paul L. Joskow, 2008. "Lessons Learned From Electricity Market Liberalization," The Energy Journal, , vol. 29(2_suppl), pages 9-42, December.
    10. Filippini, Massimo & Wild, Jorg, 2001. "Regional differences in electricity distribution costs and their consequences for yardstick regulation of access prices," Energy Economics, Elsevier, vol. 23(4), pages 477-488, July.
    11. Pablo T. Spiller & Mariano Tommasi, 2008. "The Institutions of Regulation: An Application to Public Utilities," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 20, pages 515-543, Springer.
    12. Nemoto, Jiro & Nakanishi, Yasuo & Madono, Seishi, 1993. "Scale Economies and Over-capitalization in Japanese Electric Utilities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 431-460, May.
    13. Hosoe, Nobuhiro, 2006. "The deregulation of Japan's electricity industry," Japan and the World Economy, Elsevier, vol. 18(2), pages 230-246, March.
    14. He, Y.X. & Zhang, S.L. & Yang, L.Y. & Wang, Y.J. & Wang, J., 2010. "Economic analysis of coal price-electricity price adjustment in China based on the CGE model," Energy Policy, Elsevier, vol. 38(11), pages 6629-6637, November.
    15. Konan, Denise Eby & Van Assche, Ari, 2007. "Regulation, market structure and service trade liberalization," Economic Modelling, Elsevier, vol. 24(6), pages 895-923, November.
    16. Bahçe, Serdal & Taymaz, Erol, 2008. "The impact of electricity market liberalization in Turkey: "Free consumer" and distributional monopoly cases," Energy Economics, Elsevier, vol. 30(4), pages 1603-1624, July.
    17. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    18. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1999. "Winners and Losers from the Privatization and Regulation of Utilities: Lessons from a General Equilibrium Model of Argentina," The World Bank Economic Review, World Bank, vol. 13(2), pages 357-378, May.
    19. Necmiddin Bagdadioglu & Catherine Waddams Price & Thomas Weyman-Jones, 2007. "Measuring Potential Gains from Mergers among Electricity Distribution Companies in Turkey using a Non-Parametric Model," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 83-110.
    20. Robinson, Sherman & El-Said, Moataz, 2000. "GAMS code for estimating a social accounting matrix (SAM) using cross entropy methods (CE)," TMD discussion papers 64, International Food Policy Research Institute (IFPRI).
    21. Coupal, Roger H. & Holland, David W., 2002. "Economic Impact Of Electric Power Industry Deregulation On The State Of Washington: A General Equilibrium Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), pages 1-17, July.
    22. Claude Menard & Mary M. Shirley (ed.), 2005. "Handbook of New Institutional Economics," Springer Books, Springer, number 978-0-387-25092-2, September.
    23. repec:zbw:bofitp:2004_002 is not listed on IDEAS
    24. Künneke, Rolf W. & Voogt, Monique H., 1997. "Modelling welfare effects of a liberalisation of the Dutch electricity market," Energy, Elsevier, vol. 22(9), pages 897-910.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tooraj Jamasb & Rabindra Nepal & Govinda R. Timilsina, 2017. "A Quarter Century Effort Yet to Come of Age: A Survey of Electricity Sector Reform in Developing Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Jamasb,Tooraj & Nepal,Rabindra & Timilsina,Govinda R., 2015. "A quarter century effort yet to come of age : a survey of power sector reforms in developing countries," Policy Research Working Paper Series 7330, The World Bank.
    3. Tooraj Jamasb & Rabindra Nepal & Govinda Timilsina & Michael Toman, 2014. "Energy Sector Reform, Economic Efficiency and Poverty Reduction," Discussion Papers Series 529, School of Economics, University of Queensland, Australia.
    4. Ali Akkemik, K., 2009. "Cost function estimates, scale economies and technological progress in the Turkish electricity generation sector," Energy Policy, Elsevier, vol. 37(1), pages 204-213, January.
    5. Erisa Dautaj Şenerdem & K. Ali Akkemik, 2020. "Evaluation of the reform in the Turkish electricity sector: a CGE analysis," International Journal of Economic Policy Studies, Springer, vol. 14(2), pages 389-419, August.
    6. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    7. Akkemik, K. Ali, 2011. "Potential impacts of electricity price changes on price formation in the economy: a social accounting matrix price modeling analysis for Turkey," Energy Policy, Elsevier, vol. 39(2), pages 854-864, February.
    8. Sumei Chen & Lingyun He, 2013. "Deregulation or Governmental Intervention? A Counterfactual Perspective on China's Electricity Market Reform," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(4), pages 101-120, July.
    9. Fuat Oğuz, 2010. "Competition by regulation in energy markets: the case of Turkey," European Journal of Law and Economics, Springer, vol. 30(1), pages 41-58, August.
    10. Imam, M. & Jamasb, T. & Llorca, M. & Llorca, M., 2018. "Power Sector Reform and Corruption: Evidence from Electricity Industry in Sub-Saharan Africa," Cambridge Working Papers in Economics 1801, Faculty of Economics, University of Cambridge.
    11. Worch, Hagen & Truffer, Bernhard & Kabinga, Mundia & Eberhard, Anton & Markard, Jochen, 2013. "A capability perspective on performance deficiencies in utility firms," Utilities Policy, Elsevier, vol. 25(C), pages 1-9.
    12. Ajayi, Victor & Weyman-Jones, Thomas & Glass, Anthony, 2017. "Cost efficiency and electricity market structure: A case study of OECD countries," Energy Economics, Elsevier, vol. 65(C), pages 283-291.
    13. Estrin, Saul & Pelletier, Adeline, 2016. "Privatisation in Developing Countries: What Are the Lessons of Recent Experience?," IZA Discussion Papers 10297, Institute of Labor Economics (IZA).
    14. Hang Gao & Johannes Van Biesebroeck, 2014. "Effects of Deregulation and Vertical Unbundling on the Performance of China's Electricity Generation Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 62(1), pages 41-76, March.
    15. Estrin, Saul & Pelletier, Adeline, 2018. "Privatization in developing countries: what are the lessons of recent experience?," LSE Research Online Documents on Economics 87348, London School of Economics and Political Science, LSE Library.
    16. Asane-Otoo, Emmanuel, 2016. "Competition policies and environmental quality: Empirical analysis of the electricity sector in OECD countries," Energy Policy, Elsevier, vol. 95(C), pages 212-223.
    17. Parker, David & Kirkpatrick, Colin & Figueira-Theodorakopoulou, Catarina, 2008. "Infrastructure regulation and poverty reduction in developing countries: A review of the evidence and a research agenda," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 177-188, May.
    18. Bigerna, Simona & D'Errico, Maria Chiara & Polinori, Paolo, 2022. "Environmental variables and power firms' productivity: micro panel estimation with time-Invariant variables," MPRA Paper 114157, University Library of Munich, Germany.
    19. Amenta, Carlo & Aronica, Martina & Stagnaro, Carlo, 2022. "Is more competition better? Retail electricity prices and switching rates in the European Union," Utilities Policy, Elsevier, vol. 78(C).
    20. Xuejuan Su, 2015. "Have customers benefited from electricity retail competition?," Journal of Regulatory Economics, Springer, vol. 47(2), pages 146-182, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:36:y:2011:i:5:p:3282-3292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.