Industrial electricity prices in the European Union following restructuring: A comparative panel-data analysis

Abstract

This paper analyses the impact of regulatory reform on industrial electricity prices, and the differential between industrial to household prices, for the period 2003 to 2013 in 15 European Union countries. A static econometric panel-data model is applied, supplemented by a dynamic model, which includes the possible effect of endogeneity. Our main conclusion is that electricity market reform has not resulted in a reduction in prices for industrial users. Moreover, the findings suggest that industrial consumers have largely borne the costs derived from the reform process. Among the variables considered, only third-party access appears to be related to lower industrial prices and a lower price differential.