Ownership of the electricity market in Finland and Turkey (1900-2000)

• Journal: Global Academic Society Journal: Social Science Insight, Vol. 3, No. 11, year 2010, pp. 11-28.
• Author(s): Emine Zeytinli
• Category: Social Science Insight III
• Keywords: electricity market, deregulation, ownership, economic development, history of electricity market, Finland, Turkey

Abstract

The power sector has existed for over 100 years first in the major European countries and in the others later on. Throughout this time, it experienced waves of change in its structure and regulatory approach driven by technical and economic developments. Regulatory reform of the power sector involves a complex interplay of different factors. There is a dynamic relationship between restructuring, ownership and regulatory changes, changes in institution of competition.
Economic activities need certain amount of energy and it is one of the most important factors in economic and social development and one of the most required inputs for the production. Therefore, countries aim to establish their energy systems to provide reliable energy for the economy.
The aim of the study is to analyse the electricity market with the historical perspective in Finnish and Turkish cases both economic and ownership background of the power market. Finnish electricity market has a unique structure. The industry is diversified in the production technologies: nuclear, hydropower and all types of thermal units are exploited. The market has always been a multi-player business. Besides, Finnish electricity market is one of the most competitive markets in the world. In Turkey, in contrast, the legal and regulatory framework surrounding the electricity market and liberalization and radical reconstruction of the market has always been on the agenda. The Turkish electricity market was operated by state-owned companies. It has been deregulated under the guidance of International Monetary Fund (IMF) and World Bank since 1984. As in many other countries, reforms on the electricity market in Turkey have been based on increasing the private participants in the market and strengthening competition. Turkey has typical developing country features such as having less efficient electricity system, small private sector participation, lack of political institutions, skilled and experienced human resources.