Multi-Utility Deregulation Ed 2 2006

Abstract

Introduction

• This report consists of 3 volumes - Electricity, Gas, Water & Waste
• Market liberalisation and privatisation are pushing ahead
• Despite some failure and growing opposition
• The overall direction is towards liberalisation
• Deregulation and privatisation in all three sectors has now reached a stage when it is possible to see patterns and learn from experience, some hard earned
• There have been undoubted successes, why do they differ from faiures?
• The process is entering a new stage of "critical evaluation"

Key Findings

• The North American electricity and gas markets are partially deregulated
• The momentum towards liberalisation of the electricity and gas supply industries continues around the world but progress is varied
• As a region only the EU is moving systematically in a co-ordinated manner towards deregulation but recent evaluations have revealed shortcomings in progress
• Other markets are developing new structures on an individual country basis
• There is evidence that deregulation does not work as effectively in small markets, because there is not enough volume to justify a large enough number of participants at the various levels
• The privatisation of water utilities is totally different from the energy utilities
• It usually involves establishing an operating company to manage the business of the asset owner, which retains ownership of pipes, treatment works and other plant
• In the past few years there have been an increased number of privatisations of the water utilities, with
• An increasing number of reversals and withdrawals and escalating opposition
• Some larger operators are now withdrawing from the international WWS market
• In May 2006 three announcements threw the European energy sector into confusion and it is a difficult stage to predict the outcomes
• After a "bedding in" period some governments and institutions are now questioning the success of market liberalisation in the energy sector