Regulation in Liberalised Energy sectors: Introduction and Concepts

Publisher Summary This chapter addresses the issues of regulation of the electricity and the gas sectors. It discusses the regulatory issues, as they arise from the liberalization of the network industries, and presents the concepts and theoretical instruments with respect to electricity and gas regulation in Europe. The chapter highlights that regulation is a multidimensional process and regulators are only key element of a larger system where multiple actors interact. It suggests that the role of judicial and dispute settlement institutions must also be considered. The importance of consultative bodies (administrative or ministerial) and organized lobbies (consumer groups, unions) should be included into the wider analysis of the regulatory process. Further, the chapter focuses the ways in which liberalization process has influenced, modified, or altered the traditional (i.e., pre-liberalization) regulatory systems, which historically, were built around monopolies and the domination of State-owned operators. It also explores the possibility of observing general patterns in the design and implementation of the post-liberalization regulatory frameworks in the electricity and gas sectors. Finally, the chapter discusses the influence of regulation on both the development of the markets and business strategies.