PPT Slide
Ingredients for Electricity Restructuring Success
1) Dynamic efficiency -> productivity growth
- Medium and Long term time horizons are most difficult
- May be sacrificing static efficiency for dynamic efficiency
2) Decentralized Decision Making
- Economic Theory suggests competition is good substitute for central planning
- Competition will provide better means for risk allocation
- Market pricing forces individuals to transmit expectations to market participants
3) Decentralized decision making will require making sophisticated tools available to many more players at lower costs