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Unbundling costs in the energy sector: competitive environment for the customers´ benefits or too costly experiment?

Author

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  • Milan Vondráček
  • Tomáš Skuček

Abstract

The paper describes process of electricity market liberalization, and concentrates on one phase - unbundling. First part sums up findings on electricity market liberalization, and explains unbundling principles, initial situation and expected outcome. In the second part unbundling costs are analyzed and in the third part, fulfillment of unbundling targets and its contribution to improve end-customer's position are assessed. The authors arrived to conclusion that unbundling contributed to decrease electricity end-price for households in the 2005 - 2008 period, despite substantial unbundling costs. However other factors, such as demand increase and electricity price convergence between the Czech Republic and Germany, were much stronger and caused substantial electricity price increase in the examined period.

Suggested Citation

  • Milan Vondráček & Tomáš Skuček, 2010. "Unbundling costs in the energy sector: competitive environment for the customers´ benefits or too costly experiment?," Ekonomika a Management, Prague University of Economics and Business, vol. 2010(3).
    • Handle: RePEc:prg:jnleam:v:2010:y:2010:i:3:id:102
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    References listed on IDEAS

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    1. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2008. "Economies of Scale and Scope in Multi-Utilities," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 123-144.
    2. Erin T. Mansur, 2008. "Measuring Welfare in Restructured Electricity Markets," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 369-386, May.
    3. de Nooij, Michiel & Baarsma, Barbara, 2009. "Divorce comes at a price: An ex ante welfare analysis of ownership unbundling of the distribution and commercial companies in the Dutch energy sector," Energy Policy, Elsevier, vol. 37(12), pages 5449-5458, December.
    4. Pollitt, Michael, 2008. "The arguments for and against ownership unbundling of energy transmission networks," Energy Policy, Elsevier, vol. 36(2), pages 704-713, February.
    5. Baarsma, Barbara & de Nooij, Michiel & Koster, Weero & van der Weijden, Cecilia, 2007. "Divide and rule. The economic and legal implications of the proposed ownership unbundling of distribution and supply companies in the Dutch electricity sector," Energy Policy, Elsevier, vol. 35(3), pages 1785-1794, March.
    6. David Newbery, 2005. "Introduction," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-10.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Energetika; unbundling; energy; energy distribution; distibuce elektrické energie;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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