Lessons from deregulation: Understanding electricity markets in South America

South America has been the most progressive region in the developing world in terms of deregulating the electricity industry. In this paper we compare the evolution of deregulation, from initiation to the current state, in four South American countries: Argentina, Brazil, Chile, and Colombia. These four countries are similar in many dimensions, such as culture, language and macro-economic development. They are also all depending, to a large extent, on hydro-generated electricity. All four countries have implemented different deregulated systems, allowing a unique possibility to compare the performance of different implementations of deregulation on one continent. We describe the course undertaken by these countries and the results attained so far, and also compare and contrast the development of the different electricity industries. Finally, we discuss what can be learned from these countries and what they can learn from each other.