The trend toward liberalization and internationalization in economic development has caused the electricity structure of the world nations to change a great deal since 1970. It was legal that power plants were established by the private sector in the UK since 1983. As the result that "The Electricity Privatization White Paper" and "Electricity Law" were promulgated in 1988 and 1989, the British government was the first one to deploy privatization and liberalization of electricity market and implement successfully. The UK became the benchmarking of other countries because of the significant positive effect and developments. Then each government actively promoted and made needed reforms at privatization and liberalization of electricity market. It has been 20 years to advance the electricity liberalization market since 1983 in UK. It is worth to study how the effect and the dynamic process of the electricity liberalization is in UK. This focus of the report is on the cause, background and conditions of UK electricity liberalization market and on the evaluating performance model. To make a comprehensive survey of relevant evaluating indicators, the performance of electricity liberalization in UK is excellent. No wonder The UK is the most competitive electricity market within the EU and G7 from 2001 to 2005. To sum up the work on looking back on the UK electricity liberalization for about 20 years, the key success factors are competitive market forces, energy policy, balancing mechanism, the revised law in coordination and full information. All are the reference resources for Taiwan to build the favorable liberalization model.

Electricity Liberalization Independent Power Plant Project Finance Electricity Pool Biletral Contract

Electricity power is an irreplaceable resource in industry for a country. Enough and steady-offered electricity is also the support to develop not only traditional industry but high technology industry. Taiwan is a place, where is lacking of natural resources. There is only 3 % of which can be self ¡Vcontained. In fact, electricity power plays one of important roles in achieving ¡§Economic Miracle of Taiwan.¡¨ Basically, electricity power embraces three parts of power generation, power transmission, and distribution. And it is managed by the way of vertically integration. Traditionally, electricity power is assorted into public utility because of its huge principal and social resources, even concerning with the economy and society of the country and is governed and controlled by the government. Whatever country promotes electricity liberalization, the government and the academic put their eye on foster the total efficiency of management through market mechanisms. Electricity liberalization has been working for more than twenty years. Of course, there are some successful cases, for example, like England, Australia, and etc. They do benefit from increasing the occurrence, the efficiency, and decrease the price after operating electricity liberalization. As to Taiwan, the government has the same policy on it, too. The amendments are under discussion in The Legislative Yuan. By referencing to electricity liberalization of other countries and comparing their experiences with Taiwan, the questions below are searched in this thesis. First, does the policy in Taiwan really satisfy the essence of electricity liberalization? Second, could power generation, power transmission, and distribution of the electricity industry be operated by vertically integrated way? After electricity liberalization, it is important that how to do could get good combined with competition of the market, the offer of steady electricity and the society justice. If not, how to modify the rules would satisfy the needs of country development and expectations of the society.

In this thesis current questions regarding the functionality of liberalized electricity markets are studied addressing different topics of interest in two main directions: market power and competition policy on electricity wholesale markets, and network investments and incentive regulation. The former is studied based on the case of the German electricity market with respect to ex-post market power analysis and ex-ante remedy development. First an optimization model is designed to obtain the competitive benchmark which can be compared to the observed market outcomes between 2004 and 2006. In a second step the horizontal breaking up of dominant firms (divestiture) is simulated applying equilibrium techniques (the classical Cournot approach and the Supply Function Equilibrium approach). The later issue of transmission capacity investment is addressed by highlighting the complexity of network investments in electricity markets and by analyzing a regulatory mechanism with a two part tariff approach. The technical characteristics of power flows are combined with economic criteria and tested for different network settings.