Restructuring the Power Sector: The Case of Small Systems
Author: Robert Bacon Date: 6/1/1994 (PDF, 200KB)
The pattern of power sector restructuring being applied in most countries is derived from the experience of Argentina, Chile, and the United Kingdom. This model is based on capturing the benefits of competition in the generation sector and regulating those parts of the system that cannot be competitive and that may therefore exploit their monopoly position. Robert Bacon argues that small power systems may experience a very different balance of advantages and disadvantages from these changes. Even when it is possible to introduce limited competition in generation, the costs of vertical separation may be so large that they offset the gains from competition.