The role of centralised coordination in electricity markets

It is well accepted that markets are the most effective arena for organising productive activities. In the liberalisation of electricity sectors the role for government was envisioned as that of the “night watchman” that intervenes in the market only when the latter fails to allocate scare resources efficiently or when the operation of the market leads to a net welfare loss. In practice, however, due to the presence of various market imperfections and design issues, the post-liberalisation era has been accompanied by a rise in the intervention of governments in the market. This has been exacerbated by decarbonisation policies rising higher up the agenda of policy makers. This paper asks two simple but fundamental questions: what is the role of centralised coordination (reflecting government decisions) in electricity markets?  What interventions are justified and how should they be designed and implemented?

By: Rahmat Poudineh

Latest Tweets from @OxfordEnergy

  • OIES publishes its new gas quarterly review: With the smallest spread between Gazprom realised price and NBP since… https://t.co/aJMozV6lUe

    June 24th

  • Quarterly Gas Review – Analysis of Prices and Recent Events – Issue 2 https://t.co/075fO46XGN

    June 20th

  • OIES's @thierry_bros quoted in French @RFI on Australia LNG issues: higher domestic gas prices, much lower taxes th… https://t.co/2Dh5GtUZP5

    June 19th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.