The liberalization of the European electricity market is supposed to reduce electricity prices by opening up to competition and by promoting integration of the common European market. Deregulation allows energy consumers to choose their electric energy supplier and therefore dissolves electric utility monopolies. The resulting re-regulation and restructuring of the electricity industry has created oppor-tunities and challenges that need to be addressed to ensure long-term capacity sustainability.
The promise and benefit expectations of electricity market liberalization may need to be tempered by the reality of the process. Market liberalization of the electricity supply sector depends on many different factors and boundary conditions in the EU. In order to analyze these issues, we will use Austria as an example showing the development in liberalization, deregulation, and even re-regulation processes and the impact on the industry structure and final consumer pricing.
Given the industry structure, incentives to invest in the Austrian transmission and distribution networks remain to be established. We will show that high inflexible taxes and monopoly protected transmission costs, both together account for 80% of the price of electricity. Moreover, only 20% of the electricity market is liberalized and thus any price reductions due to the liberalization of the market will be minimal and therefore possibly "non existent" in Austria.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Background
- 2.1 Market components
- 2.2 Market basics and participants
- 2.3 Balancing demand and supply
- 2.4 Accessing the electricity network
- 2.5 Unbundling
- 2.6 Retail and wholesale markets
- 2.7 Pricing electricity in a competitive market
- 3 Liberalization issues
- 3.1 Regulation
- 3.1.1 EU Directive for regulation
- 3.1.2 Reasons for development of a single market
- 3.1.3 Stranded costs
- 3.2 Deregulation
- 3.2.1 Deregulation difficulties
- 3.2.2 Pricing
- 3.2.3 Safety of long-term supply
- 3.3 Impact on Industry Structure
- 3.3.1 Restructuring
- 3.3.2 Mergers and acquisitions
- 3.1 Regulation
- 4 Austrian electricity market
- 4.1 Deregulation
- 4.2 Market access
- 4.3 Participants
- 4.4 Generation
- 4.5 Fuels for generation
- 4.6 Balancing
- 4.7 Unbundling and price
- 4.8 Foreign involvement
- 5 Conclusions
- 5.1 Future work
- 6 References
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work explores the process of electricity market liberalization in Europe, focusing on Austria as a case study. The primary objective is to analyze the impact of deregulation and re-regulation on the Austrian electricity market, specifically examining the development of industry structure and final consumer pricing.
- The effects of market liberalization on electricity prices and competition
- The role of regulation and deregulation in shaping the electricity market
- The impact of market liberalization on the structure of the electricity industry
- The challenges of balancing supply and demand in a liberalized market
- The influence of foreign investment and international market forces on the Austrian electricity market
Zusammenfassung der Kapitel (Chapter Summaries)
The first chapter provides an introduction to the topic of electricity market liberalization and outlines the scope of the analysis. Chapter 2 delves into the fundamental components of the electricity market, covering topics like market basics, participants, balancing supply and demand, accessing the electricity network, unbundling, retail and wholesale markets, and pricing mechanisms. Chapter 3 examines the liberalization issues, focusing on regulation, deregulation, and the impact on industry structure. The fourth chapter investigates the specific case of the Austrian electricity market, highlighting deregulation, market access, participants, generation, fuels, balancing, unbundling, price, and foreign involvement. Finally, chapter 5 presents conclusions drawn from the analysis and outlines potential areas for future research.
Schlüsselwörter (Keywords)
Electricity market liberalization, deregulation, re-regulation, industry structure, consumer pricing, Austria, European Union, EU directives, transmission and distribution networks, market access, generation, fuels, balancing, foreign investment, stranded costs.
- Quote paper
- Mag. Natascha Ljubic (Author), 2004, Market liberalization: an analysis of the Austrian electricity market, Munich, GRIN Verlag, https://www.grin.com/document/27885
