Search

This chapter explains the divergence in the design and structure of liberalized electricity markets. The main question is why there are so many "hybrid" markets, markets that are somewhere between their former state of a regulated monopoly and perfect competition. Electricity market design is found to be shaped by the relevant policy goals, the situation in the market at the outset of the restructuring process, and a variety of exogenous factors, outside the control of market participants and government policymakers. Moreover, feedback from market performance to the policy process is limited by time lags and bounded rationality. [ABSTRACT FROM AUTHOR]