New evidence on the impact of structural reforms on electricity sector performance

The evolution of electricity industry over the last decades has shown substantial differences between OECD countries. This paper empirically investigates to what extent different structural forms of regulation, competition and privatisation explain these international differences. It distinguishes three modes of electricity performance: a) net generation per capita, b) installed capacity and c) labour productivity. The empirical model spans the period 1975-2011 and uses panel data econometric techniques. Our analysis reveals that there is a strongly significant interaction impact on the level of electricity performance between regulation and competition. The empirical findings do confirm that a robust independent regulatory scheme must be implemented in order to achieve a competitive electricity market.