6533b857fe1ef96bd12b50f9
RESEARCH PRODUCT
Managing the liberalization of Italy's retail electricity market: A policy proposal☆
Carlo AmentaCarlo AmentaGiulia Di CroceLuciano LavecchiaCarlo Stagnarosubject
Customer engagementLiberalizationbusiness.industry020209 energyTariff02 engineering and technology010501 environmental sciencesManagement Monitoring Policy and LawMarket concentration01 natural sciencesCompetition (economics)General EnergyIncentive0202 electrical engineering electronic engineering information engineeringElectricity Competition Retail market Regulation ItalyElectricitybusinessElectricity retailingSettore SECS-P/08 - Economia E Gestione Delle ImpreseIndustrial organization0105 earth and related environmental sciencesdescription
Abstract Italy will phase out electricity retail price regulation by July 1st, 2020. Until then, residential customers and small businesses who do not choose their supplier are served under a regulated tariff named “maggior tutela” (greater protection), supplied by the local distributor at a price set by the regulator. We review the literature on electricity retail competition – with particular regard to its expected effects on prices, innovation, and customer engagement – and the conditions under which competition is expected to deliver benefits. We perform a Structure-Conduct-Performance analysis of Italy's retail electricity market for residential customers, finding two issues potentially problematic: excessive market concentration and low customer engagement. We propose a phase-out mechanism that relies on graduality, asymmetric regulation, and a mandatory, opt-out collective switching exercise. The mechanism aims to rapidly reduce market concentration by leveraging behavioral incentives to customers to switch to the cheapest supplier.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2020-02-01 |