Assignments

1. Read and translate text 10 using the vocabulary

2. Make up a plan of the text.

3. Speak on ”The Ways of Utilizing the Electric Energy from Space”.

Text 11. Benefits of Reforms

Electricity reforms are expected to increase the efficiency of the ESI. However, the most significant impacts of reforms are only expected to emerge in the long-term perspective as a result of better investment decisions. In most countries competition started very recently, so it is too early to evaluate the performance of the new electricity markets in terms of costs, prices, and global social benefits.

In a short-term perspective reforms have generally delivered their expected benefits. Large productivity increases have been reported in a number of countries largely linked to the corporatization and privatization of the utilities. Final electricity prices have decreased or remained stable in all countries examined and wholesale electricity prices have been low (e.g. relative to the cost of new generation) whenever market power has not been an issue. However, as a result of lower costs, electricity prices have also decreased in many OECD countries that did not introduce reforms until very recently making it difficult to the actual impact of competition on prices.

Market structure is a key determinant of prices in the new electricity markets. High concentration of generation assets has resulted in weak competition in the wholesale market (e.g. early UK and Spain), while more intense competition has taken place in less concentrated markets (e.g. the Nordic electricity market and Germany). The implication for policy is that reforms need to pay attention to structural competition policies such as divestitures and / or the opening of national markets to international (or interstate) trade and competition. Regulatory reform alone is not enough for competition to emerge.

A key issue for the progress of reforms is the distribution of the costs and benefits of reforms among end users, investors and other parties such as tax payers and ESI employees. The distribution of costs and benefits has a large impact on the social and political acceptability of reforms in addition to its impact on efficiency. For instance, in a number of countries cost and price reductions along the supply chain have not been fully reflected in end-user prices. This has raised concerns about the fairness of reforms and encouraged the introduction of retail competition and other measures to lower electricity prices. Also, the treatment of stranded costs and, where applicable, the form of privatization have had a significant impact on the benefits of reforms.

Vocabulary

Expected – очікуваний

impact – вплив

emerge – виявлятися; з’являтися; виникати

utilities – комунальні підприємства

assets – активи (грошові); капітал; майно

Nordic – скандинавський

divestiture – позбавлення (прав, можливостей)

tax payer – платник податків

employee – службовець

encourage – сприяти, стимулювати