127:. It would also lead to the elimination of unnecessary overhead supply in formerly nationalised markets, allowing for capital resources to be utilised more effectively on things such as network infrastructure instead of maintaining idle power stations. These increases in efficiency have led to lower prices paid by consumers in nations, such as the
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are also doubts over whether the system can ensure long-term security of supply through providing sufficient incentives to begin building generation capacity in time for when it is needed, an issue which has started to plague
Britain in the mid-2010s as spare capacity has decreased significantly to just over 1.2 percent in 2015.
142:, allowing for the more efficient use of electricity and increasing the response of consumers to prices so fewer costs are afforded to them. Furthermore, the greater interconnectedness of networks has allowed for markets to be more able to respond to peak energy demand and thereby increase the security of energy networks.
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Liberalisation of electricity tends to substantially benefit large consumers (mainly industrial users), but benefits for domestic consumers compared with a public monopoly or a regulated private monopoly are questionable, as liberalisation has been shown to pass on supply costs onto consumers. There
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in the 1990s and the first decade of the 21st century. The first liberalisation directive for the electricity markets was adopted in 1996 and for the gas markets in 1998. The next directives were adopted in 2003. It was replaced by
Directive 2009/72/EC of 13 July 2009, following a proposal by the
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A standard model for electricity liberalisation is the "British model", a reform plan which consists of six reforms: (1) creation of a competitive market for electricity, (2) the breakup of monopolized supply such that each consumer can select their provider, (3) separation of network maintenance
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by firms to raise prices. To prevent these issues as well as those associated with direct intervention to build new generation capacity, governments have had to step in to further regulate and build such capacity directly, effectively defeating the point of liberalisation. These issues have been
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Proponents of liberalisation assert that the main benefit comes from the increased competition afforded to the market. This would increase the availability and distribution of energy in supply situations by building transparent price signals and diversifying the production of electricity between
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directives favouring market liberalisation promulgated in 1996, 2003, and 2009. These programmes were supported with the interest of increasing the interconnectedness of
European energy markets and building the common market. Similar initiatives, to varying degrees, have been pursued in nations
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states that it seems that the
European Commission's liberalisation directives were motivated more about taking control of electricity from national governments, creating large European electricity companies that can compete strongly in the world market and destroying nationally owned monopoly
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has proven problematic, as many large multinationals withdrew support for power plant construction projects in the start of the 21st century, leaving countries such as
Argentina, Colombia, Chile, and Uganda to pick up the bill for the expansion of their electric networks. The privatisation of
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from generation, (4) separation of direct supply from the generation of electricity, (5) creation of an incentive structure to set market prices in monopolistic competition, and (6) the privatisation of formerly state-owned assets. It was implemented under the
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coming from electricity generation is also an issue which has gone unaddressed. Because of the monopolistic competition inherent to the energy market, there are significant issues with
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electricity favoured by liberal economists mirroring the
British model have also led to increased expenditure on advertising and power switching incentives for consumers.
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Proposal for a directive of the
European Parliament and of the Council amending Directive 2003/54/EC concerning common rules for the internal market in electricity
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The creation of pooled energy sources per the
British model and other systems adopted in Chile and Texas have led to greater demand
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Many liberalisation programmes entail the separation of corporate responsibility between power distribution and generation
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Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing
Directive 2003/54/EC
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markets, by bringing greater competition into electricity and gas markets in the interest of creating more
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Stephen Thomas (December 2005). "British
Experience of Electricity Liberalisation: A Model for India?".
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410:"Electricity liberalisation in Britain: the quest for a satisfactory wholesale market design"
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as part of a mass privatisation campaign of many of the industries nationalised by previous
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in 2007 concerning separation of supply and generation or production activities.
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compounded with growing geopolitical instability in Eastern Europe and
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around the world, such as Argentina, Chile, and the United States.
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governments in the preceding decades. The risks involved for both
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Furthermore, the experience of electricity liberalisation in
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energy markets at the turn of the millennium, directed by
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Steve Thomas, PRSIRU, Sep 2004 (archived on 17 July 2012)
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Electricity liberalisation: The beginning of the end.
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from Financial Times Lexicon (archived on 9 Aug 2016)
471:"Electricity blackouts risk up, says National Grid"
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297:European Commission (archived version 27 Dec 2015)
27:Provision of energy utilities by market mechanisms
208:companies, rather than a belief in the market.
436:"Energy liberalisation leads to higher prices"
330:"Lessons from Liberalised Electricity Markets"
76:A strong drive for liberalisation occurred in
65:, this entails complex and costly systems of
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332:. International Energy Agency. Dec 2005.
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61:. As the supply of electricity is a
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131:, which have more heavily pursued
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475:British Broadcasting Corporation
175:over gas pipelines in Ukraine.
223:European Union competition law
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434:Wright, Philip (2007-10-21).
345:Economic and Political Weekly
49:, with specific reference to
146:Problems with liberalisation
415:. University of East Anglia
57:and reductions in price by
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114:Benefits of liberalisation
18:Electricity liberalization
469:John Moylan (July 2015).
123:-turbine technologies to
513:Economic liberalization
378:"The politics of power"
69:to enforce a system of
51:electricity generation
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518:Electricity economics
255:energy-liberalisation
39:Energy liberalisation
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528:Monopoly (economics)
156:developing countries
194:European Parliament
189:European Commission
82:European Commission
55:competitive markets
218:Electricity market
162:The nature of the
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386:. 9 February 2006
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133:deregulation
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480:27 October
455:2015-10-28
419:27 October
390:28 October
240:References
104:generators
67:regulation
450:0307-1766
168:collusion
212:See also
196:and the
173:concerns
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183:In the
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230:(GATS)
179:Europe
100:Labour
413:(PDF)
353:JSTOR
205:PSIRU
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446:ISSN
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