Unbundling, Regulation and Pricing: Evidence from Electricity Distribution
Heim S, Krieger B, Liebensteiner M (2020)
Publication Language: English
Publication Type: Journal article
Publication year: 2020
Journal
Book Volume: 41
DOI: 10.5547/01956574.41.SI1.shei
Abstract
Unbundling of vertically integrated utilities has become an integral element in the regulation of network industries and has been implemented in many jurisdictions. The idea of separating the network, as the natural monopoly, from downstream retailing, which may be exposed to competition, is still subject to contentious debate, as there is much empirical evidence that unbundling eliminates economies of vertical integration, though evidence on overall price effects is still lacking. In this paper, we study the effect of legal unbundling on grid charges in the German electricity distribution industry. Using panel data on German distribution system operators (DSOs), we exploit the variation in the timing of the implementation of legal unbundling and the fact that not all DSOs had to implement unbundling measures. We are also able to identify heterogeneous effects of legal unbundling for different types of price regulation because we observe a switch in the price regulation regime from rate-of-return regulation to incentive regulation during our observation period. Our findings suggest that legal unbundling of the network stage significantly decreases grid charges in the range of 5% to 9%, depending on the type of price regulation in place.
Authors with CRIS profile
Mario Liebensteiner
Juniorprofessur für Wirtschaftswissenschaften (Energiemärkte und Energiesystemanalyse)
Involved external institutions
Zentrum für Europäische Wirtschaftsforschung (ZEW)
Germany (DE)
Mines ParisTech / École Nationale Supérieure des Mines de Paris (ENSMP)
France (FR)
Germany (DE)
Mines ParisTech / École Nationale Supérieure des Mines de Paris (ENSMP)
France (FR)
How to cite
APA:
Heim, S., Krieger, B., & Liebensteiner, M. (2020). Unbundling, Regulation and Pricing: Evidence from Electricity Distribution. Energy Journal, 41. https://dx.doi.org/10.5547/01956574.41.SI1.shei
MLA:
Heim, Sven, Bastian Krieger, and Mario Liebensteiner. "Unbundling, Regulation and Pricing: Evidence from Electricity Distribution." Energy Journal 41 (2020).
BibTeX: Download