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Abstract This analysis investigates whether the Cournot model of imperfect competition holds true in the Japanese retail electricity market, using monthly data over the period 2005 to 2010. One concern about electricity markets that are open to retail competition is the potential for collusive behavior of some suppliers. A revealed preference test of the Cournot model is conducted, using market price and firm output data, as in Carvajal et al. (2013). The application of the revealed preference test to the retail electricity market in Japan indicates that the possibility of collusive behavior among the incumbents cannot be excluded. Highlights • Whether the Cournot model of imperfect competition holds true is investigated. • A revealed preference test is conducted for the retail electricity market in Japan. • The possibility of collusive behavior is indicated in the retail electricity market. • Market size and firm size affect the possibility of collusion among the incumbents. [ABSTRACT FROM AUTHOR]

This article shows that the liberalization of the residential market for electricity in Chile may achieve important welfare gains. We built a model to assess two policy scenarios: partial and full liberalization. Simulations of the model provide equilibrium prices, the distribution toll, and welfare estimations on factual and counterfactual scenarios. Our policy recommendation is to partially liberalize the residential market for electricity. That is, to allow the entrance into this market but regulate both the incumbent's tariffs for residential customers and the distribution toll. Full liberalization, in which only the distribution toll is regulated, produces a lower increase in welfare. [ABSTRACT FROM AUTHOR]

This paper investigates the relationships among performance dimensions associated with corporate social responsibility (CSR) focusing on the U.S. electric utility sector. Results of a statistical copula approach suggest that economic performance of utilities is compatible with environmental, social, and governance performance, The CSR model has the potential to help U.S. electric utilities become better corporate citizens. [ABSTRACT FROM AUTHOR]

The power sector of Pakistan has undergone major reforms since 1994 with the objectives of increasing technical and financial performance of the sector. This study estimates and analyzes post reforms efficiency dynamics of electric distribution utilities from 2006 to 2013. Fixed effects stochastic frontier analysis results indicate that technical efficiency of utilities increased by 4.8 percent. However, total factor productivity experienced a negative growth of 11 percent as all components of index remained negative except for efficiency change. Productivity of electric distribution utilities can be enhanced by adjusting their scales of operation and reducing their size through further horizontal separation. [ABSTRACT FROM AUTHOR]

Electricity distribution system operators (DSOs) are expected to invest heavily in system innovation in the form of smart grids (SG) in order to help achieve energy policy goals. In this context, regulatory reforms to spur DSOs investments are considered a policy priority. Based on a review of the European regulatory status and using a dataset of 459 innovative SG projects, this study focuses on market and regulatory factors and performs a series of statistical tests to investigate how the different factor levels affecting SG investments in Europe. The results show that (1) lower market concentration in the electricity distribution sector (2) the use of incentive-based regulatory schemes; and (3) the adoption of innovation-stimulus mechanisms are key enablers of SG investments. [ABSTRACT FROM AUTHOR]

Promoting competition among electricity producers is crucial for ensuring allocative efficiency and lower electricity prices. This paper empirically examines the wholesale electricity market of England and Wales in order to analyze to what extent regulatory reforms were successful at promoting competition among electricity producers. As a theoretical benchmark we consider a duopoly case, based on which a regression model is specified. The estimation of the regression model allows for documenting new results about the impact of regulatory reforms on the incentive and disincentive to exercise market power by electricity producers during the liberalization process. [ABSTRACT FROM AUTHOR]

Cooperatives may become increasingly important as suppliers of electricity from renewable resources. Numerous governance models exist for establishing a renewable energy cooperative. Since members self-select into the organization, causal links between methods of internal governance and member characteristics are difficult to identify. We demonstrate how economic experiments can address this problem. In a simple social-dilemma game, we study the impact of heterogeneity in wealth on investment in a jointly owned enterprise under two different governance models. We do not find that member heterogeneity or governance model affect investment levels. A participant's endowment appears to be the most important factor explaining variation in investment. Good knowledge of cooperative governance has a positive impact on investment in the game and good knowledge of game theory has a negative impact on investment in the game. Future research should investigate the effect of the distribution of control rights on the performance of cooperative enterprises. [ABSTRACT FROM AUTHOR]

Mexico is in the midst of enacting new energy market reform. After one year of presidential proposals, 21 laws were enacted in August, 2014. The analysis shows inconsistencies and lacunae in defining an open electricity market. According to the proposed reform, incumbent Comisión Federal de Electricidad (CFE) will keep transmission and distribution vertically integrated with newly created subsidiaries subject to third-party subcontracting, while private generation participants will compete in a wholesale market operated by Centro Nacional de Control de Energía (CENACE). Following an institutional economics approach and a framework to account for transition and coordination issues, the problem of misaligned incentives is analyzed along two governance dimensions: regulatory failure and market foreclosure. The research predicts negative effects of energy reform on grid investments and government coordination in Mexico. [ABSTRACT FROM AUTHOR]

This paper shows that there are asymmetric effects of regulatory reforms within two country groups in the EU. We consider the EU27 countries, and update and enlarge the OECD/ETCR regulatory country indicators up to year 2011. When distinguishing between EU15 countries and New Member States (NMS), we find that market liberalization reduces the price of energy in the EU15 countries, while having the opposite effect for the NMS. The paper concludes that the uniform electricity market reforms in the EU apparently have had different effects between the EU15 and the NMS. This asymmetric shock is not at variance with the principles of market opening, given the different starting points, but may in turn call for different policy responses, as consumers in some NMS have faced significant price increases in a relatively short period of time. [ABSTRACT FROM AUTHOR]

What is a good balance between competition and coordination? On the upside, unbundling in network industries promotes competition, but this should be balanced against the downside of unbundling, that is, the cost of coordination. Firm-internal coordination falls away and must be replaced by external market mechanisms. This is a non-trivial task. The cost of flawed coordination resulting from fragmentation can be substantial and policy should focus more on market mechanisms and governance structures to secure better coordination. This paper examines the problem of coordination and discusses with real-world examples why the market faces difficulty in providing effective coordination. [ABSTRACT FROM AUTHOR]

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO 2 opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO 2 prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time. [ABSTRACT FROM AUTHOR]

Coordination costs in a wholesale electricity market are a relevant public policy consideration. The mitigation of coordination costs, all else equal, should increase participation in the marketplace. Since Federal Energy Regulatory Commission (FERC) Order 888 was issued in 1996, the level of trading activity in bulk electricity markets has increased significantly. In 1999, FERC issued Order 2000 to advance the role of regional transmission organizations (RTOs) in the restructured marketplace for wholesale electricity. RTOs have the potential to reduce the coordination costs, while also having the countervailing effect of causing market participants to incur compliance costs. This paper utilizes the diversity of the United States electricity market and a panel data set representing electric utilities for the period 1990–2009 to study the effects that RTOs have had on wholesale electricity exchange. The paper finds that the presence of a transparent wholesale marketplace for electricity has the effect of increasing participation, but this participation is uneven across types of electric utilities. Greater participation is seen for investor-owned and larger utilities. The results have important implications for policy aimed at wholesale markets and the transmission organizations, as the opportunities afforded by transparency may not be uniformly distributed across all market participants. [ABSTRACT FROM AUTHOR]

This article considers whether African utility regulators can draw useful lessons from the British experience over the past thirty years. We focus on three features that are considered key properties of the British regulatory model: price-cap incentive regulation, independent regulatory agencies and an emphasis on introducing competition where possible. For each property, we ask how relevant the model is for most African countries. Overall, we argue that although the British model probably has some lessons which can help improve utility performance in Africa, the problems that they help to solve are generally second-order. Ultimately, institutional weaknesses are the main root of regulatory failure in many African countries, and these weaknesses call for a model of regulation designed specifically to address them. [ABSTRACT FROM AUTHOR]