The Liberalization Of Europe's Electricity Market

1574 words - 6 pages

INTRODUCTIONThe importance of electricity in the world economy can hardly be underestimated. It serves as an input in almost every industry and we, as people have grown more and more dependent on electricity.The electricity sector was, like most other utilities, traditionally a nationalized sector in many countries across Europe. In many cases a state monopoly was installed to dominate the supply in the whole sector in an effort to realise a 'social' optimum without exercising monopoly power. During the second half of the twentieth century, a trend of deregulation and privatisation was introduced into the energy sector. The coal and coke sectors were the first components to be liberalized in the European Union. Nowadays a restructuring of the electricity sector is gaining pace. This restructuring involves privatisation and deregulation of the sector: the state monopoly is abandoned and market power divided over several private suppliers; or in other words, free market competition is introduced.The subject of privatisation of electricity markets is an extremely interesting one because it has a significant impact on many aspects of the European societies. As described in the third chapter, the privatisation has a clear impact on employment, environment and prices. Of course the list of affected sectors and aspects is much longer.The fist chapter of this paper will describe the background of the electricity sector: its structure, the background and several tendencies that have led to the recent change of course.The second chapter describes the restructuring itself: the process of denationalisation the electricity sector through deregulation. The third chapter, finally, describes the impact of the privatisation after the first steps of its implementation in the EU countries.CHAPTER 1: the nationalised electricity sector.1.1 NationalisationThe energy sector, which consists of the electricity, coal, oil and gas sectors was traditionally a nationalized sector. Nationalisation is a process in which the state takes control over a whole sector and thus creates a monopoly in that sector.Usually, nationalisation is desirable when the free market is unable to rule a sector or when market failure occurs. This market failure can be the impossibility for private entrepreneurs to operate in a certain sector, for example when huge investments are required to enter the sector, as is the case in the railway sector. The necessary railway grid requires an investment which is impossible for private companies to make. It is also possible that certain sectors do not serve the public interest optimally. This can happen when one or a few companies exercise a certain monopoly power in a sector, maximising their profits by increasing the prices of the goods or services they sell. This can raise issues of inequality when the high prices exclude certain categories of consumers from consumption. A transfer of these sectors into public ownership is a means of handling these...

Find Another Essay On The liberalization of Europe's electricity market

The effects of individual visit scheme and the liberalization of gamble license to the development Macau's economy.

2272 words - 9 pages living consumption takes 38% of the general consumption respectively. Visitors also pay for the traffic fees, telephone fees and mementoes etc. In addition, most of the mainland visitors gamble in Macau.Under these situations, many industries in Macau can receive more market demand. Profits motivate the hotel industry, gambling industry, retail industry, and tourism industry to work together. All the industries become a whole service system actually

Personal Understanding of Hydrogen Fuel Cells Being the Future to Generating Electricity

698 words - 3 pages , unlocking why everything behaves the way it does. With the hydrogen fusion project in construction and the recent use of hydraulic fracturing which has caused environmental and social dispute, I chose to undertake the extended project qualification related to this, energy, as chemistry leads these efforts. In my EPQ, I discuss whether hydrogen fuel cells are the future to generating electricity. The project has improved my primary and secondary

Entering the Market of Hungary

1535 words - 6 pages : According to GlobalEdge using the market potential index( MPI) , here is what I have concluded about Hungary. It has a very small market size, calculated based on urban population and electricity consumption, and market growth which is based on average annual growth rate of energy use and real GDP growth rate which, both of these areas I have concluded to be threats against FDI. Their market intensity wasn't very high either which is calculated

The Sources of Market Failure

1319 words - 5 pages The Sources of Market Failure Market failure is a situation in the free Market system that prevents the most efficient allocation of economic resources. An optimum allocation of resources is said to exist when it is impossible to make on e member of society better off without making at least one member of society worse off by reallocation the resources to produce a different range of goods and services. Market failure

The Relevance of Market Research

560 words - 3 pages Most businesses aim to grow, to be profitable and to increase market share. The most efficient way to accomplish these objectives is by conducting a market research, which will assist the company to collect and record data, making sense of all available information and therefore cooperating to develop accurate marketing strategies. By conducting a market research, Timberland LLC would gain knowledge to understand the business environment that it

The Importance of Market Research

1051 words - 4 pages The Importance of Market Research Apple Inc is a multinational corporation founded in 1976 in Cupertino, California, by Steve Jobs and Steve Wozniak and was originally named Apple Computers, Inc (Apple, 2011). The company began as an organization that sold computers and computer hardware but this has led the way for the company to create innovative products in the field of electronic MP3 players, cell phones, entertainment, and media products

The Effects of Market Failures

2048 words - 8 pages The Effects of Market Failures Innovation has a crucial impact on the standards of living in particular economy. It is generally agreed that research and innovation are the main sources of growth and job creation in market economies. i.e. output is increased through greater acquisition of knowledge. Subsequently, 2 things matter for economic growth: savings and the state of the productive knowledge (i.e. shows how

The Concept of Market Segmentation

4563 words - 18 pages The Concept of Market Segmentation The assistant to the Manager of the marketing department of Dyson have been asked to write a report that describes the concept of market segmentation with suggestion on how Dyson could segment its markets, an outline of the new product development process along with suggestions of how Dyson should apply these stages and concluding with an explanation of how Dyson can perform their

Weekly Analysis of the Market

1341 words - 5 pages During the week the market was exposed to a number of economic data points which ultimately helped drive equities marginally higher for the week. On Monday we received October consumer credit which came in better than expected at down $3.5 billion, compared to a revised -$8.8 billion in the prior period and better than forecast estimates of -$9.4 billion. While the head line number looks encouraging, implying consumer credit constrictions are

Wide scale penetration of Renewable Electricity in the Greek Energy System in view of the European decarbonization targets for 2050

761 words - 4 pages During the last twenty years there has been a steady increase of energy consumption in Greece, due to economic development and subsequent behavioral changes. High consumption of electricity resulted in corresponding increase of conventional fuels consumption. In particular indigenous lignite was the strategic choice of Greece for electricity production even before the seventies oil crisis. Furthermore crude oil and oil products imported for

Requirements of specific market opportunities; The Fiji fresh market

563 words - 2 pages Horticultural exports have grown steadily from 1970, 1.8% of exports through to 2003 9.3% of total Horticulture exports. Fiji is one of the main countries that New Zealand exports fresh potatoes too, reaching $9 million in 2003. However, the Fiji potato market demands specific requirements on the fresh potatoes that are exported there.Potatoes that are exported to Fiji are required be to of a high standard. Potatoes that are exported to Fiji

Similar Essays

The Story Of Electricity Essay

1993 words - 8 pages In a recent newspaper article (Guernsey electricity supply ‘more’ expensive in May 2012) it stated that electricity costs are going to increase and supplies would become unreliable or erratic. It is obvious that this will cause a considerable distress and discomfort for the residents of Guernsey because electricity is needed for warmth and lighting. The purpose of this essay is to describe how and why electricity has become such an important

The History Of Electricity Essay

1230 words - 5 pages The History of Electricity Luigi Galvani (1737-1798) was an Italian physician and physicist. He was one of the first to investigate the phenomenon of what came to be named as 'bioelectrogenesis'. Galvani reported a series of experiments he had been conducting since 1780 where fog's legs violently contracted if a metal scalpel accidentally touched a certain leg nerve during dissection. He showed that contractions

To What Extent Was The Policy Of Deregulation In The Energy Market Responsible For The California Electricity Crisis?

3761 words - 15 pages electricity crisis. This crisis was directly related to the 'deregulation' of the Californian energy market in 1998. During this crises there were several 'rolling blackouts' and very high prices for electricity.While in Economics class we were shown a documentary film called Enron: The Smartest Guys in The Room, this film investigates the bankruptcy of Enron Corporation and its participation in the California crisis. I was immediately

The Boom Of Persuasive Totalitarianism In Europe's Damaged Nations

1941 words - 8 pages control their systems in a non-democratic manner. The USSR marked the beginning of European totalitarianism with an economic system which the soviets called socialism that, unlike Italy and Germany, strongly rejected the ideals of capitalism. Socialism in Russia recognized that the means of production in the society should be owned by the state to be used for the benefit of all people. In order to eradicate a free market economy and establish