Definition of energy liberalisation

Energy liberalisation is a political and regulatory process that brings competition into former electricity and gas monopolies. Competition occurs mainly in power generation and sales activities. Network activities such as transport and distribution are traditionally maintained regulated.

The aim of energy liberalisation is to create competitive markets, leading to more efficiency and innovation in the industry. The argument of price reduction has been less valuable in the energy sector than in the telecommunications industry, mainly because of the rise of primary energy prices (fossil fuels and renewables).

Energy liberalisation comes traditionally with a privatisation process, when formerly stated-owned utilities are privatised or part-privatised.

Example

In the European Union, energy liberalisation took place mainly between 1999 and 2007. The supervision of this process was conducted by competition authorities in Brussels (DG Competition & DG Energy) and locally in each member state.

It has led to a complete reconfiguration of the electricity and gas industries. European actors like GDF-Suez, EDF, EON, RWE, Enel, and Iberdrola have built successful European positions.

The gas-electricity convergence for pricing, marketing and generation has lead to a rapid growth of gas activities for former electrical actors. Access to natural gas resources is now a major political issue. [1]

See 

Article: Gazprom raided in EU antitrust investigation

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