Unexpected consequences of liberalisation: metering, losses, load profiles and cost settlement in Spain’s electricity system

Joan Batalla-Bejerano, Maria Costa-Campi and Elisa Trujillo-Baute

No 2015/16, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: European energy markets have undergone a major transformation as they have advanced towards market liberalisation and it is vital that the details of these developments be carefully examined. The success of liberalisation is based on smart regulation, which has been capable of providing solutions to unforeseen events in the process. Our paper seeks to contribute to existing understanding of the unexpected consequences of the liberalisation process in the power system by examining a natural experiment that occurred in Spain in 2009. In that year, the electricity supply by distribution system operators (DSOs) disappeared. This positive change in retail market competition, as we demonstrate in this paper, has had an unexpected effect in terms of the system’s balancing requirements. We undertake a rigorous assessment of the economic consequences of this policy change for the whole system, in terms of its impact on final electricity prices.

Keywords: Electricity market design; balancing services; electricity market balance; liberalization; natural experiment (search for similar items in EconPapers)
JEL-codes: D47 L51 Q41 Q42 Q47 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015
New Economics Papers: this item is included in nep-ene and nep-eur
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Related works:
Journal Article: Collateral effects of liberalisation: Metering, losses, load profiles and cost settlement in Spain’s electricity system (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2015-16

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