Regulatory Choices and Commitment: Challenges for Electricity Market Regulation in Kosovo

Abstract:     
This article describes choices to be made in selecting and implementing a reform model for the electricity industry and derives some implications for the situation in Kosovo. The article argues that the appropriate reform model depends on the circumstances in the jurisdiction being considered. Especially in small and less developed electricity systems, a dilemma may emerge: the technical circumstances suggest the implementation of a model with few competitive elements, whereas political circumstances urge a competition-oriented model. Hence, especially in small systems, a delicate trade-off emerges that significantly complicates the decisions to be made. This is obviously relevant for Kosovo. International opening of Kosovo's electricity market may provide a solution to the dilemma. This would encompass a reduction of state sovereignty for electricity regulation and widereaching market opening for private investors and electricity traders.

JEL Classification: H4, K2, L5, L9, P3, R5

Accepted Paper Series