Power Market Sophistication and Sector Outcomes : A Focus on Social Performance, Electricity Reliability, and Renewable Energy Penetration
This paper exploits a novel and comprehensive dataset on power market structure over 1989–2020 to analyze the relationship between power market sophistication—defined as the move toward a more competitive market—and final sector outcomes: social pe...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/724011615984027125/Power-Market-Sophistication-and-Sector-Outcomes-A-Focus-on-Social-Performance-Electricity-Reliability-and-Renewable-Energy-Penetration http://hdl.handle.net/10986/35293 |
| Summary: | This paper exploits a novel and
comprehensive dataset on power market structure over
1989–2020 to analyze the relationship between power market
sophistication—defined as the move toward a more competitive
market—and final sector outcomes: social performance,
electricity reliability, and renewable energy penetration.
Unlike most previous studies on the performance of power
sector reforms, the paper relies on the de facto
implementation of reforms rather than de jure reform
adoption. The results of panel regression models suggest
that moving from vertically integrated utility models toward
more sophisticated power markets is associated with higher
electricity access, better consumer affordability, larger
renewable energy penetration, and lower system average
interruption duration index. The results also highlight
that, for certain steps in power market sophistication,
improvements in sector outcomes are greater. For instance,
moving from vertically integrated utility models to single
buyer models is associated with relatively larger
improvements in access to electricity and electricity
reliability, while moving from wholesale competition to
retail competition models is associated with a relatively
larger penetration of renewable energy. |
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