Thursday, October 20, 2005

Costs & benefits from 1.5 decade of electricity liberalisation

Referring to Leonardo ENERGY's discussion paper on this subject, prepared by AERE, a web event took place today to present the findings of the paper. Participants reacted that, although the paper does not present major new facts, it puts together a growing body of evidence that pictures a quite different story on liberalisation than is usually reported. View the presentation slides from the web event.

1 comment:

Claudio Canizares said...

The following issues should also be considered in these types of analysis:

- Rate of inflation for multi-year price comparisons.

- The trends shown and discussed in the paper go back to 1991, so it's hard to argue that the deregulation/privatization process, which really started in Europe and North America in the early 2000's, is the only culprit for the problems depicted on these graphs.

- Rates in many jurisdictions with government owned, vertically-integrated utilities were basically subsidized (e.g. Ontario, Canada), so no surprisingly, prices went up when market were privatized/deregulated. One advantage of paying the actual cost of electricity is that it'll force people to think before wasting energy.

- Many government owned utilities were bloated with lots of people and inefficiencies, as many other bureaucratic entities, so no surprisingly the number of people employed in the sector has gone down.

- The privatization/deregulation process has shaken a VERY conservative market place, which has been very slow in developing and adopting new technologies. New technical and business opportunities are being created by this shake up.