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Second Generation Electricity Reforms in Latin America and the California Paradigm

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  • Juan-Pablo Montero

    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

  • Hugh Rudnick

Abstract

In this paper we discuss second-generation electricity reforms being formulated in Latin America and how they are being reshaped by the California crisis, which had stood as a paradigm, at least in theory, for fully competitive markets. We argue that the main lesson policy makers in Latin America should draw from the experience in California and other electricity markets around the world is that the liberalization of wholesale markets will not result in more competitive outcomes where market concentration is significant, final consumers are isolated from actual marginal production costs and capacity is tight. At least in the case of Argentina and Chile, the California crisis has had a "positive externality" by persuading policy makers, at least momentarily, to postpone liberalization reforms and make them realize the complexities in implementing competitive markets.

Suggested Citation

  • Juan-Pablo Montero & Hugh Rudnick, 2002. "Second Generation Electricity Reforms in Latin America and the California Paradigm," Documentos de Trabajo 216, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:216
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    References listed on IDEAS

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    Cited by:

    1. Jamasb, Tooraj, 2006. "Between the state and market: Electricity sector reform in developing countries," Utilities Policy, Elsevier, vol. 14(1), pages 14-30, March.
    2. Liski, Matti & Montero, Juan-Pablo, 2006. "Forward trading and collusion in oligopoly," Journal of Economic Theory, Elsevier, vol. 131(1), pages 212-230, November.
    3. Gnansounou, Edgard & Dong, Jun, 2004. "Opportunity for inter-regional integration of electricity markets: the case of Shandong and Shanghai in East China," Energy Policy, Elsevier, vol. 32(15), pages 1737-1751, October.
    4. Arango, Santiago, 2007. "Simulation of alternative regulations in the Colombian electricity market," Socio-Economic Planning Sciences, Elsevier, vol. 41(4), pages 305-319, December.
    5. 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.
    6. Arango, Santiago & Dyner, Isaac & Larsen, Erik R., 2006. "Lessons from deregulation: Understanding electricity markets in South America," Utilities Policy, Elsevier, vol. 14(3), pages 196-207, September.
    7. Roques, Fabien & Finon, Dominique, 2017. "Adapting electricity markets to decarbonisation and security of supply objectives: Toward a hybrid regime?," Energy Policy, Elsevier, vol. 105(C), pages 584-596.
    8. Kathleen Spees & Samuel A. Newell & Johannes P. Pfeifenberger, 2013. "Capacity Markets - Lessons Learned from the First Decade," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    9. Ma, Chunbo & He, Lining, 2008. "From state monopoly to renewable portfolio: Restructuring China's electric utility," Energy Policy, Elsevier, vol. 36(5), pages 1697-1711, May.
    10. Moreno, R. & Barroso, L.A. & Rudnick, H. & Mocarquer, S. & Bezerra, B., 2010. "Auction approaches of long-term contracts to ensure generation investment in electricity markets: Lessons from the Brazilian and Chilean experiences," Energy Policy, Elsevier, vol. 38(10), pages 5758-5769, October.
    11. Pietrosemoli, Licia & Rodríguez Monroy, Carlos, 2013. "The impact of sustainable construction and knowledge management on sustainability goals. A review of the Venezuelan renewable energy sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 683-691.

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