Electricity and telecommunication markets: A discussion of market designs

Abstract

The German electricity market is undergoing the largest transformation since its liberalization. With increasing shares of renewable generation and decreasing spot exchange prices utilities are searching for new business models. Lessons can be learned from the telecommunication industry which has been liberalized at similar times but has been more competitive and customer centric since. In this paper we review the development of both industries along the four dimensions of competition, tariff design, auction design and the quality of service. We then develop an electricity market design based on experiences from the development of the telecommunication industry.