By Aitor Zurimendi Isla (Universidad del País Vasco)
Given the circumstances of the electricity market, especially the need for a monopoly in transport and distribution activities, and the presence of market power in generation, the ideal structure market requires a limitation to vertical integration or to possibility of taking part at the same time in regulated activities (transmission and distribution), and in generation and commercialization markets (“free activities”). It seeks the regulation of the European Commission. On the other hand, transport network should not be controlled by companies involved in the generation or distribution. The no separation of these activities would extend the distorting effects of natural monopoly to other activities in which competition can exist. So that the effective separation between them is essential.
However, measures of effective separation, that the Spanish law has been established, have been limited in scope. It has combined a number of structural measures with other behavioral requirements (restricting legal rights for companies), but the former are usually much more effective than the latter, and the cost of monitoring the latter is very high. In this paper all these measures are analyzed focusing on their success or failure to achieve efficient regulation, making some suggestions for the improvement of regulation. This regulatory failure causes structural inefficiency that among other negative consequences, leads to electricity prices are above their competitive level.
Download Full Article: HERE
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
EU Brands Apple’s iPadOS as Gatekeeper in Tech Crackdown
Apr 29, 2024 by
CPI
Brussels to Investigate Meta Platforms’ Handling of Disinformation on Facebook and Instagram
Apr 29, 2024 by
CPI
OpenAI Faces Privacy Complaint in Vienna Over ChatGPT’s Data Handling
Apr 29, 2024 by
CPI
EU Launches Investigation into Czech State Aid for Digital TV Operators
Apr 29, 2024 by
CPI
UK Probes Lindab’s Acquisition of HAS-Vent Amid Fears of Market Monopoly
Apr 28, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI