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09 Apr 2008

Ownership Unbundling: A Logic Outage for the Anti-Energy Liberalisers?

Alan Riley

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Last September the European Commission’s unveiled new proposals for energy-market liberalisation, which focused on ‘ownership unbundling’. Under such a regime, the business of operating gas pipelines or an electricity network is separated from the business of providing gas or generating power. The initiative immediately drew opposition from the highly vertically integrated energy incumbents. This Commentary by Alan Riley, Professor at City Law School, City University, London, and Associate Research Fellow, CEPS, examines the principal arguments used to resist these proposals and finds they are insubstantial and cast doubt on the ability of the incumbents’ lobby to sustain their case against energy liberalisation.