IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v26y2013icp56-66.html
   My bibliography  Save this article

Economics and the development of system operators in infrastructure industries

Author

Listed:
  • Cave, Martin
  • Stern, Jon

Abstract

This paper discusses the role of system operators (SOs) in four infrastructure industries: electricity, natural gas, railways and water supply. It describes the types of system operator and their role as co-ordinating entities. The paper relates the role of SOs to the problems of economic discrimination that arise in partially or wholly vertically integrated infrastructure companies and the introduction of upstream competition over networks. The paper discusses short, medium and long-term issues that arise and indicates the relevant economic theory framework for tackling each of them as well. It also discusses the SO variants observed for the four industries in the UK, the US and the European Union, with their strengths and weaknesses.

Suggested Citation

  • Cave, Martin & Stern, Jon, 2013. "Economics and the development of system operators in infrastructure industries," Utilities Policy, Elsevier, vol. 26(C), pages 56-66.
    • Handle: RePEc:eee:juipol:v:26:y:2013:i:c:p:56-66
    DOI: 10.1016/j.jup.2013.06.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178713000362
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2013.06.001?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. Paul L. Joskow, 2008. "Lessons Learned From Electricity Market Liberalization," The Energy Journal, , vol. 29(2_suppl), pages 9-42, December.
    2. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    3. repec:bla:jindec:v:49:y:2001:i:3:p:319-33 is not listed on IDEAS
    4. G. B. Richardson, 1971. "Planning versus competition," Europe-Asia Studies, Taylor & Francis Journals, vol. 22(3), pages 433-446.
    5. T. Randolph Beard & David L. Kaserman & John W. Mayo, 2001. "Regulation, Vertical Integration and Sabotage," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 319-333, September.
    6. repec:aei:rpbook:24881 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jon Stern, 2015. "Past And Potential Roles Of Electricity System Operators: From Liberalisation To Climate Change Management In Britain," Cambridge Working Papers in Economics 1507, Faculty of Economics, University of Cambridge.
    2. Kury, Theodore J., 2015. "The impact of coordination on wholesale market participation: The case of the U.S. electricity industry," Utilities Policy, Elsevier, vol. 32(C), pages 38-44.
    3. Ibarra-Yunez, Alejandro, 2015. "Energy reform in Mexico: Imperfect unbundling in the electricity sector," Utilities Policy, Elsevier, vol. 35(C), pages 19-27.
    4. Moore, Mark A. & Boardman, Anthony E. & Vining, Aidan R., 2017. "Analyzing risk in PPP provision of utility services: A social welfare perspective," Utilities Policy, Elsevier, vol. 48(C), pages 210-218.

    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. Simshauser, Paul & Tian, Yuan & Whish-Wilson, Patrick, 2015. "Vertical integration in energy-only electricity markets," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 35-56.
    2. Nele Friedrichsen, 2011. "Governing Smart Grids - the Case for an Independent System Operator," Bremen Energy Working Papers 0011, Bremen Energy Research.
    3. Nele Friedrichsen, 2015. "Governing smart grids: the case for an independent system operator," European Journal of Law and Economics, Springer, vol. 39(3), pages 553-572, June.
    4. Ismael Pérez-Franco & Agustín García-García & Juan J. Maldonado-Briegas, 2020. "Energy Transition Towards a Greener and More Competitive Economy: The Iberian Case," Sustainability, MDPI, vol. 12(8), pages 1-14, April.
    5. Tin Cheuk Leung & Kwok Ping Ping & Kevin K. Tsui, 2019. "What can deregulators deregulate? The case of electricity," Journal of Regulatory Economics, Springer, vol. 56(1), pages 1-32, August.
    6. Emmanuel Petrakis & Panagiotis Skartados, 2022. "Vertical Opportunism, Bargaining, and Share-Based Agreements," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 549-565, June.
    7. Oliver Hart, 2013. "Noncontractible Investments and Reference Points," Games, MDPI, vol. 4(3), pages 1-20, August.
    8. Christopher Hansman & Jonas Hjort & Gianmarco León-Ciliotta & Matthieu Teachout, 2020. "Vertical Integration, Supplier Behavior, and Quality Upgrading among Exporters," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3570-3625.
    9. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    10. Laura Alfaro & Nick Bloom & Paola Conconi & Harald Fadinger & Patrick Legros & Andrew F Newman & Raffaella Sadun & John Van Reenen, 2024. "Come Together: Firm Boundaries and Delegation," Journal of the European Economic Association, European Economic Association, vol. 22(1), pages 34-72.
    11. Marino, Marianna & Parrotta, Pierpaolo & Valletta, Giacomo, 2019. "Electricity (de)regulation and innovation," Research Policy, Elsevier, vol. 48(3), pages 748-758.
    12. Shi, Guanming & Stiegert, Kyle & Chavas, Jean Paul, 2010. "An Analysis of Pricing in Horizontal and Vertical Markets: The Case of the Cottonseed Market," Working Papers 201439, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    13. Palovic, Martin, 2022. "Administrative congestion management meets electricity network regulation: Aligning incentives between the renewable generators and network operator," Utilities Policy, Elsevier, vol. 79(C).
    14. Bondarev, Anton & Weigt, Hannes, 2017. "Sensitivity of energy system investments to policy regulation changes: Application of the blue sky catastrophe," Working papers 2017/08, Faculty of Business and Economics - University of Basel.
    15. Kaller, Alexander & Bielen, Samantha & Marneffe, Wim, 2018. "The impact of regulatory quality and corruption on residential electricity prices in the context of electricity market reforms," Energy Policy, Elsevier, vol. 123(C), pages 514-524.
    16. Ricard Gil & Frederic Warzynski, 2015. "Vertical Integration, Exclusivity, and Game Sales Performance in the US Video Game Industry," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(suppl_1), pages 143-168.
    17. Allain, Marie-Laure & Chambolle, Claire & Rey, Patrick & Teyssier, Sabrina, 2021. "Vertical integration as a source of hold-up: An experiment," European Economic Review, Elsevier, vol. 137(C).
    18. Sharon Novak & Scott Stern, 2008. "How Does Outsourcing Affect Performance Dynamics? Evidence from the Automobile Industry," Management Science, INFORMS, vol. 54(12), pages 1963-1979, December.
    19. Sterner, Thomas & Ewald, Jens & Sterner, Erik, 2024. "Economists and the climate," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    20. Alain-Désiré Nimubona & Bernard Sinclair-Desgagné, 2011. "Polluters and Abaters," Annals of Economics and Statistics, GENES, issue 103-104, pages 9-24.

    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:juipol:v:26:y:2013:i:c:p:56-66. 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: https://www.sciencedirect.com/journal/utilities-policy .

    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.