Evolution of Global Electricity Markets

Foreword

Electricity market reform was intended to increase the role of market forces throughout the electricity sector and correspondingly to reduce the role of political forces. The main components were private ownership, restructuring, competition, and incentive regulation. These were to replace state ownership and control in a monopoly sector characterized by political rather than economic decisions, inefficiency, a cost-plus mentality, and unresponsiveness to the wishes of consumers.

Properly implemented, this reform could be expected to bring greater productive efficiency—better planned and implemented capital expenditure and lower operating costs. There would be greater responsiveness to customer preferences—improved reliability and better ...