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Free electricity, dirty electricity, no electricity?

The impact of liberalising the electricity market

In recent years the electricity market has been increasingly opened up, with the sector being liberalised and players now preparing for privatisation and further internationalisation of operations. At the request of the Dutch Energy Policy Platform, CE has carried out an (interim) analysis of the impact of these developments on the three traditional 'mainstays' of energy policy, that the electricity supply should be:
  • clean (indicator: CO2 emissions)
  • reliable (indicator: security of supply), and
  • affordable (indicator: company costs / customer tariffs).
Overall, it can be concluded that there has been a shift from providing for long-term, societal interests to the attainment of short-term, corporate goals. As a result, the three 'classic' aims of energy policy - affordability, reliability and environmental compatibility - are now under threat. Liberalisation as such is proving to have negative impacts, particularly in terms of environmental compatibility, which are offset only partly by flanking policies. With time, the same will hold for reliability and affordability, too. If societal objectives are to be safeguarded, the situation must be structurally addressed by means of rather more stringent flanking policies.

Authors

Geert Warringa

Delft, September 2005

report in Dutch

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