Friedrichsen (2011), N: Investment, Unbundling, and Vertical Governance in Electric Power Systems, Jacobs University and Bremer Enerie Institut.
Unbundling, the vertical separation of electricity networks from generation and retail,and liberalization have been common features of electricity market reform around the world. As a consequence, the structure of electric power systems is becoming increasingly decentralized. Electricity supply is an interrelated system that requires careful coordination between supply and demand. This applies especially to system operation. But also in the long term coordination exhibits considerable benefit since the siting of generators has considerable influence on the network and may defer/ or increase investment need. With unbundling, firm-internal coordination across the entire supply chain is no longer possible. Coordination problems can arise because of lacking information or because of incentive problems. Since lack of coordination can cause efficiency losses, alternative governance mechanisms are needed to restore coordination in a market environment. This PhD thesis explores the coordination problem and possible solutions in five related articles.