ISCR April seminar: Is Vertical Integration the Natural State of Affairs in Electricity?
ISCR April Seminar
Tuesday 28 April 2009, to be held at Old Government Buildings Lecture Theatre 4 (First Floor), Wellington at 6pm
Please Note: Drinks and light refreshments will be served from 5.30-6.00pm in the foyer of Rutherford House outside Lecture Theatre 2
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Is Vertical Integration the Natural State of Affairs in Electricity?
In reformed electricity systems around the world vertical integration between generation and retailing (or large customers) is emerging as a natural way to manage wholesale price risks and market power issues, and to support investment. It does so against a backdrop of problems with the approach typically relied upon when reforms commence - namely, structural separation supported by long-term contracting. In systems reliant on this approach, contract markets have not emerged or performed as expected, resulting in suppressed investment and in some cases bankruptcies. In this seminar Richard Meade surveys some of the problems associated with contracting in electricity systems, and reasons for why vertical integration offers a more natural alternative. Despite concerns about the impact of vertical integration on retail entry, there is reason to believe vertical integration is a better approach to managing wholesale market power and to sustain retail competition, while at the same time preserving incentives for investment.
Presented by: Richard Meade
Richard Meade is a Research Principal at ISCR and Principal of Cognitus Advisory Services Limited. This seminar is based on the invited paper (co-authored with Seini O'Connor), Comparison of Long-Term Contracts and Vertical Integration in Decentralised Electricity Markets, that he presented in January at a workshop hosted by LARSEN-EUI in Florence.
If you would like to attend this seminar please contact: kathy.mckenzie@vuw.ac.nz Ph: (04) 463-5562