Liberalizing the Dutch Electricity Market: 1998-2004

TILEC Discussion Paper No. 2005-009

22 Pages Posted: 15 Dec 2005

See all articles by Eric van Damme

Eric van Damme

TILEC and CentER, Tilburg University

Date Written: March 2005

Abstract

We describe the evolution of the structure of the Dutch electricity market since the E-Act 1998 that implemented the first EU Electricity Directive. The initial idea of the government was to combine liberalization in supply with concentration in generation, with the attempt to create a national champion that could compete on the European market. As the producers could not agree, the attempt failed and competition could develop. The production side now is less concentrated than in several other EU countries and the competition authority has played an active role in keeping it that way, among others by means of its intelligent analysis of the Nuon-Reliant merger, in which a VPP auction was proposed as a remedy. In contrast, regulation of the network business cannot be considered a success as bad drafting of the law prevented effective incentive regulation. Finally, the liberalization of the retail market for green energy, in effect since July 2001, has shown that retail competition may not yield many consumer benefits.

Keywords: Electricity, Market liberalization, Regulation

JEL Classification: K23, L51, L94

Suggested Citation

van Damme, Eric E.C., Liberalizing the Dutch Electricity Market: 1998-2004 (March 2005). TILEC Discussion Paper No. 2005-009, Available at SSRN: https://ssrn.com/abstract=869728 or http://dx.doi.org/10.2139/ssrn.869728

Eric E.C. Van Damme (Contact Author)

TILEC and CentER, Tilburg University ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 3045 (Phone)
+31 13 466 3066 (Fax)

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