Lessons from electricity market failure in California

Abstract

The balancing of competitive opportunities and regulatory measures is of great strategic importance in electricity supply industry (ESI) reform since the ESI is a critical national infrastructure whose failure will have severe social and political implications. In this paper, factors which may have led to the recent electricity crisis in California are analyzed first, followed by a brief discussion about the impact of this event on the power industry restructuring in Asia, and about the issue of how to ensure sufficient generation capacity under the electricity market environment.