THE ELECTRICITY MARKET, HOW IS IT STRUCTURED?
- Publié par : ARETA Academy
- Catégorie : Green finance
In an economy, the production and supply of electricity is vital. Electricity is involved in almost all goods and services, and in large quantities, consumed directly by households.
The term “electricity market” refers generally to the various forms of organization of the electricity production and marketing sector. There are generally two types of structure:
1 – Vertically integrated electricity market: The electricity sector is organized into vertically integrated territorial monopolies, from production to retail distribution: at a given point in the territory a customer could only have one electricity supplier .
2- Regulated electricity market: Over the past ten years, the regulatory framework in which the electricity industry operates has started to change. Some countries have adopted laws introducing competition in production and in the retail market and to do so have separated these functions from the “network” part of the activity, which allows new entrants to have access to existing networks. , and by creating markets where prices are determined by supply and demand.