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Competition and contracts in the Nordic Residential Electricity Markets

Author

Listed:
  • Littlechild, S.
Abstract
The main Nordic residential electricity markets (Norway, Sweden and Finland) effectively opened to retail competition around 1998. They have not been subject to regulatory controls on prices or other contract terms. Between 11 and 29 per cent of residential customers have switched suppliers and between a fifth and a half of all residential customers have chosen alternative contractual terms of supply. These alternatives include fixed price contracts ranging from 3 months to five years duration, as well as spot-price related terms, instead of the standard variable tariffs. The use of these alternatives is increasing over time, and there is considerable product innovation. This paper surveys these developments and illustrates with case studies of significant suppliers in each Nordic market. The market is thus ascertaining and bringing about the outcomes that customers prefer. Without retail competition, it is not clear how regulation will replicate this aspect of the market process.

Suggested Citation

  • Littlechild, S., 2005. "Competition and contracts in the Nordic Residential Electricity Markets," Cambridge Working Papers in Economics 0550, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:0550
    Note: EPRG, IO
    as

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    File URL: http://www.electricitypolicy.org.uk/pubs/wp/eprg0506.pdf
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    References listed on IDEAS

    as
    1. Littlechild Stephen C., 2002. "Competition in Retail Electricity Supply," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-26, June.
    2. Stephen Littlechild, 2003. "Electricity: regulatory developments around the world," Chapters, in: Colin Robinson (ed.), Competition and Regulation in Utility Markets, chapter 2, pages 61-90, Edward Elgar Publishing.
    3. Nils-Henrik M. von der Fehr, Eirik S. Amundsen and Lars Bergman, 2005. "The Nordic Market: Signs of Stress?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 71-98.
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    5. Paul L. Joskow, 1998. "Electricity Sectors in Transition," The Energy Journal, , vol. 19(2), pages 25-52, April.
    6. Stephen Littlechild, 2004. "UK domestic energy contracts, the 28 day rule, and experience in Sweden," Working Papers EP45, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    7. David M. Newbery, 2002. "Regulatory Challenges to European Electricity Liberalisation," Working Papers EP12, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Richard Green & Tanga McDaniel, 1998. "Competition in electricity supply: will ‘1998’ Be worth it?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 273-293, August.
    9. Littlechild, Stephen, 2006. "Residential energy contracts and the 28 day rule," Utilities Policy, Elsevier, vol. 14(1), pages 44-62, March.
    10. Eirik S. Amundsen & Lars Bergman, 2003. "The Deregulated Electricity Markets in Norway and Sweden: A Tentative Assessment," Chapters, in: Jean-Michael Glachant & Dominique Finon (ed.), Competition in European Electricity Markets, chapter 5, Edward Elgar Publishing.
    11. Amundsen, Eirik S. & Bergman, Lars, 2005. "Why has the Nordic electricity market worked so well?," Working Papers in Economics 18/05, University of Bergen, Department of Economics.
    12. repec:hal:spmain:info:hdl:2441/7189 is not listed on IDEAS
    13. Littlechild, Stephen C, 2003. "Wholesale Spot Price Pass-Through," Journal of Regulatory Economics, Springer, vol. 23(1), pages 61-91, January.
    14. Paul L. Joskow, 2003. "The Difficult Transition to Competitive Electricity Markets in the U.S," Working Papers 0308, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    15. repec:hal:wpspec:info:hdl:2441/7189 is not listed on IDEAS
    16. Stephen C. Littlechild, 2001. "Competition And Regulation In The U.K. Electricity Industry (With A Brief Look At California)," Journal of Applied Corporate Finance, Morgan Stanley, vol. 13(4), pages 21-38, January.
    17. Atle Midttun & Joar Handeland & Terje Omland, 2003. "The Nordic Public Ownership Model Under Transition to Market Economy: The Case of Electricity," Chapters, in: Jean-Michael Glachant & Dominique Finon (ed.), Competition in European Electricity Markets, chapter 6, Edward Elgar Publishing.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    retail competition; electricity; regulation; Nordic countries;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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