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Managing the liberalization of Italy's retail electricity market: A policy proposal☆

Carlo Stagnaro (), Carlo Amenta (), Giulia Di Croce and Luciano Lavecchia ()

Energy Policy, 2020, vol. 137, issue C

Abstract: Italy will phase out electricity retail price regulation by July 1st, 2020. Until then, residential customers and small businesses who do not choose their supplier are served under a regulated tariff named “maggior tutela” (greater protection), supplied by the local distributor at a price set by the regulator. We review the literature on electricity retail competition – with particular regard to its expected effects on prices, innovation, and customer engagement – and the conditions under which competition is expected to deliver benefits. We perform a Structure-Conduct-Performance analysis of Italy's retail electricity market for residential customers, finding two issues potentially problematic: excessive market concentration and low customer engagement. We propose a phase-out mechanism that relies on graduality, asymmetric regulation, and a mandatory, opt-out collective switching exercise. The mechanism aims to rapidly reduce market concentration by leveraging behavioral incentives to customers to switch to the cheapest supplier.

Keywords: Electricity; Competition; Retail market; Regulation; Italy (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.enpol.2019.111150

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