Unlocking the grid [electricity industry restructuring]

Abstract

If the ideas of electricity as a product and its transport as a service are separated, consumers can be given a choice among competing generators. So how can consumers choose suppliers? The authors answer this question by considering the four main points of electricity industry restructuring. The first is the question of who can sell what to whom, or, how much competition is necessary to ensure that the competitive market benefits the electric power sector as a whole. Second, what rules should govern the wholesale power market and bilateral trades (how the transmission system should be controlled and priced). Third is the issue of ownership. Decisions need to be made as to which functions must be operated separately because of market power concerns or conflicts of interest. Fourth is managing the transition.