Erdogdu, Erkan (2005): Energy market reforms in Turkey: An economic analysis.
Download (4Mb) | Preview
In the early 2000s, the Republic of Turkey has initiated an ambitious reform program in the most important segments of her energy market; namely, electricity, natural gas, petroleum and liquefied petroleum gas industries, which requires privatization, liberalization as well as a radical restructuring of these industries. However, there is no consensus that the measures introduced are optimal. The present dissertation attempts to answer, first, whether or not recently introduced energy market reforms in Turkey are optimal from an economic perspective to ensure a fully functioning energy market; and second, what still needs to be done to improve them. The dissertation not only provides an economic analysis of these reforms but also lists some policy suggestions with crucial importance. Since the rapid electricity demand growth is the most contentious reason behind the recent reforms; the dissertation specifically focuses on the issue by both providing an electricity demand estimation and forecast, and comparing the results with official projections. The study concludes that despite relatively good legislative framework, in practice, the reforms in Turkey are far from ideal as they are mainly in the form of "textbook reforms"; and therefore a significant amount of work still lies ahead of Turkey to set up a fully-fledged energy market.
|Item Type:||MPRA Paper|
|Original Title:||Energy market reforms in Turkey: An economic analysis|
|Keywords:||Turkish energy market, regulation, restructuring, privatization, competition, electricity, natural gas, petroleum, LPG, energy demand, partial adjustment model, cointegration, ARIMA modelling|
|Subjects:||Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q47 - Energy Forecasting
|Depositing User:||Erkan Erdogdu|
|Date Deposited:||24. Nov 2010 20:18|
|Last Modified:||12. Feb 2013 20:07|
Askin, B. A.; Kraft, J. (eds.) (1976), Econometric Dimensions of Energy Demand and Supply, Lexington, Mass., 1976.
Beenstock, M.; Willcocks, P (1981), ‘Energy consumption and economic activity in industrialized countries: The dynamic aggregate time series relationship’, Energy Economics, Volume 3, Issue 4, October 1981, pp 225-232.
Beesley, M. E.; Littlechild, S. C. (1989), ‘The Regulation of Privatized Monopolies in the United Kingdom’, RAND Journal of Economics, Volume 20, Number 3, Autumn 1989.
Beesley, M. E. (ed.) (1992), Privatization, Regulation and Deregulation, London: Routledge in association with the Institute of Economic Affairs, 1992.
Beesley, M. E. (ed.) (1994), Regulating Utilities: The Way Forward, London: Institute of Economic Affairs, 1994.
Beesley, M. E. (ed.) (1995), Utility Regulation: Challenge and Response, London: Institute of Economic Affairs in association with the London Business School, 1995.
Beesley, M. E. (ed.) (1996), Regulating Utilities: A Time for Change?, London: Institute of Economic Affairs, 1996.
Beesley, M. E. (ed.) (1997), Regulating Utilities: Broadening the Debate, London: Institute of Economic Affairs, 1997.
Beesley, M. E. (ed.) (1998), Regulating Utilities: Understanding the Issues, London: Institute of Economic Affairs in association with the London Business School, 1998.
Beesley, M. E. (ed.) (1999), Regulating Utilities: A New Era?, London: Institute of Economic Affairs, 1999.
Bell, M. (2003), 'Regulation in Developing Countries is Different: Avoiding negotiation, renegotiation and frustration', Energy Policy, Volume 31, 2003, pp 299-305.
Biglaiser, G.; Riordan M. (2000), ‘Dynamics of Price Regulation’, The RAND Journal of Economics, Volume 31, Number 4, Winter 2000, pp 744-767.
Bishop, M.; Kay, J.; Mayer, C. (1994), Privatization and Economic Performance, Oxford: Oxford University Press, 1994.
Bishop, M.; Kay, J.; Mayer, C. (1995), The Regulatory Challenge, Oxford: Oxford University Press, 1995.
Bohi, D. R. (1981), Analyzing Demand Behavior: A Study of Energy Elasticities, Baltimore, 1981.
Boyer, M.; Laffont, J. (2003), 'Competition and the reform of incentive schemes in the regulated sector', Journal of Public Economics, Volume 87, 2003, pp 2369–2396.
Butler, E.; Robinson, C.; Kay, J.; Gillick, D.; Call, M.; Veljanovski, C.; Booth, M. (1993), But Who Will Regulate the Regulators?, London: Adam Smith, 1993.
Cakarel, E.; House, J. (2004), IPP Investment in Turkey’s Electric Power Industry, Working Paper No: 32, Program on Energy and Sustainable Development, Stanford University, November 2004.
Ceylan, H.; Ozturk, H. K. (2004); 'Estimating Energy Demand of Turkey Based on Economic Indicators Using Genetic Algorithm Approach', Energy Conversion and Management, Volume 45, 2004, pp 2525–2537.
Cook, P. (1999); 'Privatization and Utility Regulation in Developing Countries: The lessons so far', Annals of Public and Cooperative Economics, Volume 70, Number 4, 1999, pp 549-587.
Crew, M. A. (ed.) (1994), Incentive Regulation for Public Utilities, London: Kluwer Academic Publishers, 1994.
Cuaresma, J. C.; Hlouskova, J.; Kossmeier, S.; Obersteiner, M. (2004), 'Forecasting Electricity Spot-prices Using Linear Univariate Time-Series Models, Applied Energy, Volume 77, 2004, pp 87–106.
Dimitropoulos, J. (2003), Stochastic Trend Analysis of Annual UK Energy Demand Functions by Sector: A comparison with cointegration methods, M.Sc. Dissertation, University of Surrey, 2003.
Ediger, V. S.; Tatlidil, H. (2002); 'Forecasting the Primary Energy Demand in Turkey and Analysis of Cyclic Patterns', Energy Conversion and Management, Volume 43, 2002, pp 473-487.
Estache, A.; Pardina, M. R.; Rodríguez, J. M.; Sember, G. (2002), An Introduction to Financial and Economic Modeling for Utility Regulators, unpublished paper, November 2002.
Foster, C. D. (1992), Privatization, Public Ownership and the Regulation of Natural Monopoly, Oxford: Blackwell, 1992.
Fouquet, R.; Hawdon, D.; Pearson, P.; Robinson, C.; Stevens, P. (1995), The SEEC United Kingdom Energy Demand Forecast (1994-2000), Surrey Energy Economics Centre (SEEC) Occasional Paper 2, Department of Economics, University of Surrey, Guildford, UK, July 1995.
Fouquet, R.; Pearson, P.; Hawdon, D.; Robinson, C.; Stevens, P. (1997), 'The Future of UK Final User Energy Demand', Energy Policy, Volume 25, Number 2, 1997, pp 231-240.
Galindo, L. M. (2005), 'Short- and Long-Run Demand for Energy in Mexico: A cointegration approach’, Energy Policy, Volume 33, 2005, pp 1179–1185.
Giannakis, D.; Jamasb, T.; Pollitt, M. (2005), 'Benchmarking and incentive regulation of quality of service: an application to the UK electricity distribution networks', Energy Policy, Volume 33, 2005, pp 2256-2271.
Gordon, R. L.; Jacoby, H. D.; Zimmerman M. B. (eds.) (1987); Energy: Markets and Regulation, London; Cambridge, Mass.: MIT, 1987.
Greene, W. H. (2003), Econometric Analysis, 5th edition, N.J.: Prentice Hall/Pearson Education International, 2003.
Hawdon, D. (ed.); Dargay, J. M.; Fouquet, R.; Henley, A.; Miller, K.; Peirson, J. (1993), Recent Studies of the Demand for Energy in the UK, Surrey Energy Economics Discussion Paper, SEED No: 72, Department of Economics, University of Surrey, Guildford, UK, November 1993.
Helm, D.; Jenkinson, T. (eds.) (1998), Competition in Regulated Industries, Oxford: Oxford University Press, 1998.
Hendry, D. F.; Juselius, K. (2000), 'Explaining Cointegration Analysis: Part I', The Energy Journal, Volume 21, Number 1, 2000.
Hendry, D. F.; Juselius, K. (2001), 'Explaining Cointegration Analysis: Part II', The Energy Journal, Volume 22, Number 1, 2001.
Hunt, L. C. (ed.) (2003), Energy in a Competitive Market: Essays in Honour of Colin Robinson, Cheltenham: Edward Elgar, 2003.
Hunt, L. C.; Dimitropoulos, J.; Judge, G. (2005); ‘Estimating underlying energy demand trends using UK annual data’, Applied Economics Letters, Volume 12, Number 4, March 2005, pp 239-244.
Jamasb, T.; Nillesen, P.; Pollitt, M. (2003), 'Gaming the Regulator: A Survey', The Electricity Journal, December 2003, pp 68-80.
Jamasb, T.; Nillesen, P.; Pollitt, M. (2004), 'Strategic Behaviour Under Regulatory Benchmarking', Energy Economics, Volume 26, 2004, pp 825–843.
Joutz, F. L.; Silk, J. I. (1997), 'Short and Long-Run Elasticities in US Residential Electricity Demand: A co-integration approach’, Energy Economics, Volume 19, 1997, pp 493-513.
Kay, J., Mayer, C.; Thompson, D. (1986), Privatisation and Regulation: the UK Experience, Oxford: Clarendon, 1986.
Lanza, A.; Bosello, F. (2004), 'Modeling Energy Supply and Demand: A Comparison of Approaches', Encyclopedia of Energy, Volume 4, 2004, pp 55-64.
Lewis, T. B.; Sappington, D. E. M. (1989) ‘Regulatory options and price-cap regulation’, The RAND Journal of Economics, Volume 20, Number 3, Autumn 1989, pp 405-416.
Littlechild, S. C. (2000), Privatisation, Competition and Regulation, London: Institute of Economic Affairs, Occasional paper: 110, 2000.
Lyon, T. P. (1994), ‘Incentive Regulation in Theory and Practice’, in M. A. Crew (ed.), Incentive Regulation for Public Utilities, London: Kluwer Academic Publishers, 1994.
Maddala, G. S. (2001), Introduction to Econometrics, 3rd Edition, Chichester: Wiley, 2001.
Matupa, O. (2003), Modelling UK energy demand using irreversibility and price decomposition, MSc Dissertation, University of Surrey, 2003.
McAvinchey, I. D.; Yannopoulos, A. (2003), 'Stationarity, Structural Change and Specification in a Demand System: the case of energy', Energy Economics, Volume 25, 2003, 65-92.
Medlock, K. B. (2004), 'Economics of Energy Demand', Encyclopedia of Energy, Volume 2, 2004, pp 65-78.
Megginson, W. L.; Netter, J. M. (2001), ‘From State to Market: A Survey of Empirical Studies on Privatization’, Journal of Economic Literature, Volume XXXIX, June 2001, pp 321-389.
Moran, M.; Prosser, T. (eds.) (1994), Privatization and Regulatory Change in Europe, Buckingham: Open University Press, 1994.
Munasinghe, M.; Meier, P. (1993), Energy Policy Analysis and Modeling, Cambridge: Cambridge University Press, 1993.
Mwangonde, D. R. (2002), Industrial Energy Demand in The UK: A Comparative Study Using Cointegration and Stochastic Trend Analysis, MSc Dissertation, University of Surrey, 2002.
Newbery, D. M.; Pollitt, M. G. (1997), ‘The Restructuring and Privatisation of Britain’s CEGB - Was It Worth It?’, The Journal of Industrial Economics, Volume XLV, Number 3, September 1997, pp 269-303.
Pachauri, R. K. (1975), The Dynamics of Electrical Energy Supply and Demand: An Economic Analysis, New York: Praeger, 1975.
Pirie, M. (1988), Privatization, Aldershot: Wildwood, 1988.
Robinson, C. (2001), Regulating Utilities: New Issues, New Solutions, Cheltenham: Edward Elgar, 2001.
Robinson, C. (2002), Utility Regulation and Competition Policy, Cheltenham: Edward Elgar, 2002.
Sappington, D. E. M. (1991), 'Incentives in Principal-Agent Relationships', Journal of Economic Perspectives, Volume 5, Number 2, Spring 1991, pp 45-66.
Schmalensee, R. (1989), ‘Good Regulatory Regimes’, The RAND Journal of Economics, Volume 20, Number 3, Autumn 1989, pp 417-436.
Sharkey, W. W. (1982), The Theory of Natural Monopoly, Cambridge: Cambridge University Press, 1982.
Soytas, U.; Sari, R. (2003), 'Energy Consumption and GDP: causality relationship in G-7 countries and emerging markets', Energy Economics, Volume 25, 2003, pp 33-37.
Sozen, A.; Arcaklioglu, E.; Ozkaymak, M. (2005), 'Turkey's Net Energy Consumption', Applied Energy, Volume 81, 2005, pp 209–221.
Sterman, J. D. (1989), 'Modelling the Formation of Expectations: The History of Energy Demand Forecasts', International Journal of Forecasting, Volume 4, 1989, pp 243-259.
Stern, D. I. (2004), 'Economic Growth and Energy', Encyclopedia of Energy, Volume 2, 2004, pp 35-51.
Stock, J. H. (1987), ‘Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors’, Econometrica, Volume 55, Number 5, September 1987, pp 1035-1056.
Tenenbaum, B.; Lock, R.; Barker, J. (1992), 'Electricity Privatization: Structural, competitive and regulatory options', Energy Policy, December 1992, pp 1134-1160.
Thomas, R. L. (1996), Modern Econometrics: An Introduction, Harlow: Addison-Wesley, 1996.
Veljanovski, C. (ed.) (1991), Regulators and the Market: An Assessment of the Growth of Regulation in the UK, London: Institute of Economic Affairs, 1991.
Verbeek, M. (2004), A Guide to Modern Econometrics, 2nd Edition, Chichester: Wiley, 2004.
Vickers, J., Yarrow, G. (1985), Privatization and the Natural Monopolies, London: Public Policy Centre, 1985.
Vickers, J.; Yarrow, G. (1988); Privatization: An Economic Analysis, London; Cambridge, Mass: MIT Press, 1988.
Vickers, J.; Yarrow, G. (1991), ‘Economic Perspectives on Privatization’, Journal of Economic Perspectives, Volume 5, Number 2, Spring 1991, pp 111-132.
Wamukonya, N. (2003), ‘Power Sector Reform in Developing Countries: Mismatched agendas’, Energy Policy, volume 31, 2003, pp 1273–1289.
Weyman, T. G. (1986), The Economics of Energy Policy, Aldershot: Gower, UK, 1986.
Yasushi, N. (1997), An Empirical Analysis of Petrol Demand in the UK Using the Reduced Form Model and the Structural Form Model, MSc Dissertation, University of Surrey, 1997.
Yoo, S. H. (2005), ‘Electricity Consumption and Economic Growth: Evidence from Korea’, Energy Policy, Volume 33, 2005, pp 1627–1632.