California Power Crisis : Lessons for Developing Countries
California introduced competition to its retail and wholesale power markets in 1998, but has experienced a major crisis during 2000 and into 2001. The paper attempts to gain an understanding of what has happened in California, and to draw lessons f...
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| Format: | ESMAP Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/04/1733727/california-power-crisis-lessons-developing-countries http://hdl.handle.net/10986/20298 |
| Summary: | California introduced competition to its
retail and wholesale power markets in 1998, but has
experienced a major crisis during 2000 and into 2001. The
paper attempts to gain an understanding of what has happened
in California, and to draw lessons from the California
experience that are applicable to other countries. The paper
begins with an overview of the key features of the 1998
California power sector reform: how it differs from reforms
elsewhere, the events and actions that have put it in a
crisis mode, and the main lessons that can be learned from
the crisis. The main text is divided into two parts. Part I
discusses in depth lessons learned, which concern mainly the
establishment and regulation of a mandatory, wholesale power
market based on spot pricing. Since this is not a near-term
option for many developing countries, the paper also
describes other, more-limited forms of competition that may
suit their situations. Part II details the specific reforms
initiated in California, reviews the factors that led to the
crisis, and examines whether the crisis could have been
avoided through better market design and management. |
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