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Liberalization of electricity retailing in Europe: coming back or going forth?

Author

Listed:
  • Silvia Concettini

    (UNIMI - Università degli Studi di Milano = University of Milan, UPN - Université Paris Nanterre)

  • Anna Creti

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris, Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres)

Abstract

The aim of this article is to provide a mid-term evaluation of liberalization of electricity retailing in Europe taking into account some relevant analytic con- straints: di erent and often conflicting theoretical points of view, shortage of routinely collected data, problems in isolating the impact of single reforms in power sector and pervasive regulatory interventions. Theoretical approaches and empirical studies are discussed with the goal of testing the consistency of theory and practice. Our analysis suggests that direct bene ts of retail competition have been often overstated, particularly for small and residential customers. Final market has proven to be less dynamic than forecast and new entry in supply more di cult to sustain in the medium-long run. Regulatory requirements are demonstrated to be more signi cant than suggested in previous papers, due to non-negligible market imperfections. Our main conclusion is that it seems unlikely that \light-handed regulation" may fully substitute for \hard regulation" in this sector, especially for small and residential customers. Moreover, direct regulatory interventions remain essential for arranging and managing Default and Last Resort services and avoiding the risk of excluding \vulnerable customers" from trade. In the light of this limitations, further actions appear to be required to give a thorough organization to this business able to let expected outcomes of other related reforms (e.g. liberalization of generation) a stronger impact on nal customers' welfare.

Suggested Citation

  • Silvia Concettini & Anna Creti, 2013. "Liberalization of electricity retailing in Europe: coming back or going forth?," Working Papers hal-00915924, HAL.
    • Handle: RePEc:hal:wpaper:hal-00915924
    Note: View the original document on HAL open archive server: https://hal.science/hal-00915924
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    References listed on IDEAS

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    2. Fontana, Magda & Iori, Martina & Nava, Consuelo Rubina, 2017. "Switching Behavior and the Liberalization of the Italian Electricity Retail Market. Logistic and Mixed Effect Bayesian Estimations of Consumer Choice," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201721, University of Turin.
    3. Fotouhi Ghazvini, Mohammad Ali & Ramos, Sergio & Soares, João & Castro, Rui & Vale, Zita, 2019. "Liberalization and customer behavior in the Portuguese residential retail electricity market," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    4. Fontana, Magda & Iori, Martina & Nava, Consuelo Rubina, 2019. "Switching behavior in the Italian electricity retail market: Logistic and mixed effect Bayesian estimations of consumer choice," Energy Policy, Elsevier, vol. 129(C), pages 339-351.

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