Partie 2 ou 3 Nouvelle conomie lectrique - Centre International de ...

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Partie 2 ou 3 Nouvelle conomie lectrique - Centre International de ...

- 23 -Compared to the public monopoly model, troubled by insufficiency of incentive to efficiencyand restricted in terms of capacity development by the debt crisis, this model has theadvantage of being able to generate chances of raising capital by attracting private operators.But as we will develop, the overcost of the arrangement are very significant in most cases.Compared to the competition-based model, in which the market signals are supposed toprovide the incentive for investment by decentralised and uncoordinated actors, the singlebuyer model offers a number of advantages.- It allows planning by the single buyer or by the public authority that oversees the sector.In consequence, it allows avoidance of scarcity situations in which market power could beunduly exercised by the producers.- It allows a non-volatile and relatively predictable price to be maintained for the wholesalepurchasers (distributors, large consumers).- It offers the guarantees necessary for investors in terms of risk sharing.The risk sharing clauses in the contracts tend to shift much of the risk onto the single buyer,and therefore onto the public budget of the guaranteeing State and onto consumers for theprojects of the first rounds of tendering. Dynamically, however, the relations are progressivelymore balanced when the institutional environment of the industry is stabilised, that stimulatesthe confidence of developers and their financiers (Cordukes, 1995; Finon, 1998).Therefore the limitations of the single buyer model have less to do with its intrinsic faults thanwith the nature of the institutional and macroeconomic environment in which it is deployed. Itassumes that the sector has been partly reformed in order to reach a good level of efficiency;and even when the institutional environment has reached that level, it remains very muchexposed to the uncertainties of the macroeconomic environment.a. The effect of faults in the institutional environmentThe single buyer model is sometimes considered to be a way of limiting the political cost ofreform by preserving the role of the national electricity company, circumventing partialprivatisation to some parts of the industry and avoiding the complex and destabilisingintroduction of the third party access rule. Because of the stake of payment for the electricityproduced by independent producers (IPP), this model is also seen as an incentive to reformthe single buyer entity which owns a fleet of generation equipments. It is seen also as anincentive to rationalise the management of distributors originating from institutionalseparation (reduction of non-payments, non-commercial losses and overemployment), andthus compel the ministerial authority to align the regulated retail tariffs to the costs in order toallow distributors to pay the real costs of wholesale electricity to the Single Buyer.In fact, it has been observed that this situation has not been achieved in several countries,especially in Southern Asia and in the economies in transition that have adopted it, on twolevels (Lovei, 2001). Firstly, the single buyer is often caught in a “squeeze” between highelectricity prices under the IPP contracts and the limited income generated by the distributors.Two factors help maintain this squeeze situation: the government authorities’ reluctance toadjust the regulated tariffs, and the lack of incentive for the distributors to reform and improvetheir performance, especially as they are not in a direct contractual relationship with the IPPs.In order to get round this problem, it is recommended that the distributors contract directlywith the entrants in the context of long-term contracts (Lovei, 2001).incentives inv elec north south energy policy.doc created by Dominique Finon on 14/05/2004printed by JQ on 12/22/2004 at 11:43 23/31

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