During the last decade of the 20th century the electricity supply industry (ESI) underwent major evolvement and restructuring. Until very recently most network industries (mainly the ESI, and also gas, water and telecommunications) were considered to be natural monopolies. Their size, networks, capital-intensive nature and their sensitive services to the public meant, in most cases, exclusive government ownership and control. Recently, however, technological progress, particularly in information technologies and telecommunications as well as development of regulatory instruments, has enabled the introduction of a market mechanism into these traditional monopolies. One main consideration is that governments no more have the resources and intention in financing the capital-intensive projects like power stations. Governments are now more interested in financing social services rather than electricity services, which the private sector can more profitably handle. Developments vary from one country, or region, to another but a general pattern of five phases has developed.

Chapter Contents:

• 14.1 Introduction
• 14.1.1 Phase I: Early 20th century - private sector investment and monopolistic market behaviour
• 14.1.2 Phase II: Mid-20th century - public sector intervention and inefficiency
• 14.1.3 Phase III: Late 20th century - unbundling, competition, regulation and privatisation
• 14.1.4 Phase IV: Recent developments - industry convergence and globalisation
• 14.1.5 Phase V: Empowering the consumers, through the encouragement of small power (mainly in renewables) both among investors and households
• 14.2 Reorganising the ESI
• 14.2.1 The opportunities presented by liberalisation
• 14.3 Barriers in liberalised markets
• 14.4 The changing utility of the future
• 14.5 Electricity and the new digital economy
• 14.6 The utility of the future
• 14.7 The 'virtual utility' of the future
• 14.8 DSM programmes in deregulated markets
• 14.9 The need for a regulator
• References

Inspec keywords: government policies; electricity supply industry; power generation economics; monopoly

Other keywords: information technologies; electricity sector evolvement; technological progress; exclusive government control; ESI; network industries; power stations; social service financing; capital-intensive projects; regulatory instruments; electricity supply industry; exclusive government ownership; natural monopolies; market mechanism

Subjects: Power system management, operation and economics; Energy and environmental policy, economics and legislation