The changing role of the State in the expansion of electricity supply in Latin America

Abstract

Throughout the history of the electricity industry, regulatory reform has been driven by the pursuit of tools able to create conditions that would favour infrastructure investment and, generally, to surmount the obstacles that hinder system expansion. This article addresses the interaction between regulatory schemes and electric power generation investment, with a review of the changing role of the State in the expansion of electricity supply in Latin America. It contains a critical assessment of changes in the regulatory framework since the outset of electric power market reform, describing the successive approaches to regulation adopted in the last three decades. The aim of this analysis is to help identify the key factors underlying the evolution of energy policies and to contribute to the formulation of a prospective view of the direction this evolution may reasonably be expected to take.Throughout the history of the electricity industry, regulatory reform has been driven by the pursuit of tools able to create conditions that would favour infrastructure investment and, generally, to surmount the obstacles that hinder system expansion. This article addresses the interaction between regulatory schemes and electric power generation investment, with a review of the changing role of the State in the expansion of electricity supply in Latin America. It contains a critical assessment of changes in the regulatory framework since the outset of electric power market reform, describing the successive approaches to regulation adopted in the last three decades. The aim of this analysis is to help identify the key factors underlying the evolution of energy policies and to contribute to the formulation of a prospective view of the direction this evolution may reasonably be expected to take.