Soares, Maria Isabel R.T. --- "The Iberian Electricity Market: Towards a Common Market?" [2003] ELECD 56; in Glachant, Jean-Michael; Finon, Dominique (eds), "Competition in European Electricity Markets" (Edward Elgar Publishing, 2003)

Book Title: Competition in European Electricity Markets

Editor(s): Glachant, Jean-Michael; Finon, Dominique

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843761785

Section: Chapter 14

Section Title: The Iberian Electricity Market: Towards a Common Market?

Author(s): Soares, Maria Isabel R.T.

Number of pages: 24

Extract:

14. The Iberian electricity market:
towards a common market?
Maria Isabel R.T. Soares

INTRODUCTION

Since the beginning of the 1990s, the Portuguese and Spanish economies
have become steadily more closely entwined. In the beginning, the deregu-
lation of certain utilities, namely electricity, on both sides of the frontier
followed a similar model. However, since 1997 clear differences have
emerged: market organization, regulation and power industry restructur-
ing have become steadily more different, although strategic alliances
between companies have made geographical, economic and cultural links
more evident. This chapter examines the path followed by the deregulation
of the electricity sector in Iberian countries and then identifies some of the
issues, opportunities and challenges raised by closer integration. The anal-
ysis has been carried out from the viewpoint of Portugal, the smaller and
less developed country.
The chapter is divided into three main sections. The first deals primarily
with the Portuguese case, and describes the various stages of the deregula-
tion and market organization, market rules and privatization. The second
section deals with the Spanish case and follows a similar methodology. The
third section looks at the Iberian market as a whole and identifies some crit-
ical issues for the creation of an Iberian electricity market, which has been
under discussion since the beginning of 2002.


THE PORTUGUESE DEREGULATION MODEL

From State-Owned Monopoly to Market Opening

The Portuguese electricity industry has gone through dramatic changes
since 1975, when its 13 separate mainland electricity utilities were nation-
alized. In 1976, these ...