Impacts of market liberalisation on the electricity supply sector: a comparison of the experience in Austria and Germany

The impacts of market liberalisation on the electricity supply sector depend on many different factors and boundary conditions. Comparing these impacts in Austria and Germany, two countries which both participate in the European internal market and have a central geographical location in Western Europe, and which both have borders and important trade relationships with Central European countries, provides some important insights with regard to the following aspects: (a) the differences in the primary energy supply mix for electricity generation; (b) the substantial excess capacity, not only in the two countries analysed but also in the EU as a whole, and its uneven reduction due to different market opening speeds within the Community and differences in the plant stock; (c) the utility company structure, including ownership and traditional energy supply and customer relations; (d) the changing situation faced by cogeneration and small power producers; and (e) the relevant regulation of third-party access to the grid, electricity transmission, and prices for small/captive consumers. Last but not least the paper also covers the influence of the expected increase in the volumes of electricity traded in the two countries, also with their Eastern European neighbours (where the level of the playing field may not yet be equalised in the near future), and the concerns that this may lead to conflicts in the achievement of the energy policies, environmental policies, and climate change policies aimed for at the national and European level.