Laka Foundation

Publication Laka-library:
Power Generation Market Concentration in Europe 1996-2000 (2002)

AuthorÖko-Institut, Mattthis, Poetzsch
DateMay 2002
Classification 6.04.0.30/15 (INTERNATIONAL ORGANISATIONS - LIBERALISATION)
Front

From the publication:

Power Generation Market Concentration in Europe 
Öko-Institut

Abstract

The liberalisation of the European power market has significantly changed the
framework of the electricity industry. The process of market opening and securing
fair, transparent and sustainable third party access is still under way. But
(incomplete) liberalisation can be thwarted by concentration trends in the
electricity generation market.

The study analyses the market concentration trends on six regional markets
in Europe from 1996 to 2000 based on different methodological approaches.

The analysis shows two very different development patterns. On the one hand, the
market concentration in the United Kingdom decreased significantly in the last years
and lead to electricity generation markets that can be called unconcentrated similar
to the Scandinavian power production market. On the other hand, market
concentration and its trends are occurring in all other regions. In markets which are
characterized by former centralized state monopolies the concentration indicators
remain very high. Furthermore, especially on the German market, which is
historically characterized by a diversity of power generation, the recent
and the upcoming mergers push the concentration indicators to levels which
are more and more critically.

Given this background it is necessary to build more strict competition rules in
the electricity markets as a necessary counterbalance to these developments. Key
elements of this approach are a stricter unbundling, a more stringent regulatory
basis for third party access, a premium for decentralised power generation taking
into account long term avoided network costs and the elimination of other market
distortions.

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