Electricity Market Regulation – a Hindrance or a Necessity

Authors

Keywords
regulation; methods of regulation; incentive regulation.

Over the past thirty years we have been witnessing radical changes in the organizational structure of electricity markets worldwide. The vertically -integrated structures (VIS), typical of this industry, have disinte¬grated into small and independent companies to stimulate competition. A milestone in reforming the electricity markets was the establishment of a regulatory body and regulatory mechanisms that accompany the process of liberalization. However, are these mechanisms and regulation in general required? The purpose of this article is to find an answer to this question. The research area is the regulation of energy markets as a method for increasing the efficiency of companies and market operation. The research subject focuses on the different regulatory mechanisms used in the electricity markets in the EU and Bulgaria. The analysis made gives us grounds to identify an objective need for regulation of the electricity markets. Two of the four segments of the market, and namely transmission and distribution of electricity need regulation. The regulation of the other two segments, production and supply, should be limited to a minimum.

JEL: L51, D42
Pages: 20
Price: 2 Points

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