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What future(s) for liberalized electricity markets: efficient, equitable or innovative?

David M Newbery ()

The Energy Journal, 2018, vol. Volume 39, issue Number 1

Abstract: Well-designed electricity liberalization has delivered effciency gains, but political risks of decarbonizing the sector have undermined investment incentives in en-ergy-only markets, while poorly designed regulated tariffs have increased the cost of accommodating renewables. The paper sets out principles from theory and public economics to guide market design, capacity remuneration, renewables support and regulatory tariff setting, with an illustration from a high capital cost low variable cost electricity system. Such characteristics are likely to become more prevalent with increasing renewables penetration, where poor regulation is already threatening current utility business models. The appendix develops and applies a method for determining the subsidy justifed by learning spillovers from solar PV.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2018
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Working Paper: What future(s) for liberalized electricity markets: efficient, equitable or innovative? (2017) Downloads
Working Paper: What future(s) for liberalized electricity markets: efficient, equitable or innovative? (2017) Downloads
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