Building competitive energy markets: Regulatory insights from the OECD PMR indicators

Cassie Castle and Carlotta Varriale

No 1863, OECD Economics Department Working Papers from OECD Publishing

Abstract: Competitive and transparent energy markets are essential to economic growth and social wellbeing. Well-functioning markets ensure efficient energy delivery and strong incentives for innovation and investment. This requires regulatory frameworks that facilitate market entry, ensure fair access to infrastructure, and foster competition across the energy value chain. While many countries have implemented liberalisation reforms to achieve these goals, the OECD Product Market Regulation (PMR) database for the energy sector indicates that important regulatory tools, such as mechanisms for consumer engagement to reduce switching costs, and the technical and digital infrastructure to support retail price liberalisation, are not yet widely adopted. It is therefore important to complete the regulatory reform necessary to ensure the development of effective competition in energy markets to ensure better outcomes for consumers and the broader energy system.

Keywords: electricity market design; energy market liberalisation; natural gas market design; natural monopoly; OECD; product market regulation; retail competition; vertical separation (search for similar items in EconPapers)
JEL-codes: L43 L51 L94 L95 Q48 (search for similar items in EconPapers)
Date: 2026-04-01
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