Electricity sector reforms in the European Union : implications for Malta

Abstract

Over the last two decades electricity sectors in both industrialised and developing countries have been subject to restructuring in order to introduce private capital and increase competition. This has been accompanied by the introduction of new regulatory regimes. Although the effects of such reforms in a number of developed economies are now well documented, the experience of emerging countries is much less well researched and this difficulty is more pronounced when it comes to compare countries with different levels of economic development within the same economic block, such as the European Union (EU). With the adoption of the EU Energy Liberalisation package in June 2003, the internal electricity market in now set on a faster track of rapid integration and transformation into a competitive EU-wide market without internal borders between the constituent Member States. However, several theories suggest that the key elements that form the backbone of every planned sector reform within the economy should not be restricted to just competition but should be partly or wholy combined with two other components namely privatisation and independent regulation.