Electricity industry restructuring institutional arrangements and issues

Abstract

System Operators are often involved to a significant extent in forming input to the restructuring by governments of nationalised electricity industries. The final shape of the industry is, however, often dictated by issues that have little to do with system operation or technology, so it is important that system operators understand the economic and political considerations which lie behind the decisions and have some insight into the issues which arise. The objective of this paper is to outline some of the more important issues, rather than deal in depth with any single issue. It concentrates on issues arising in the Single Buyer model and in the case where some degree of Third Party Access (TPA) is permitted also, rather than on full TPA, because there appears to be limited debate about these first two cases. The paper is based largely on the author's involvement in the development within Ireland of models for migration to a fully competitive market over a number of years.