Transition to an Electricity Market: A Model for Developing Countries

Market-oriented restructuring of the electricity supply industry (ESI) in the West has led to a realization of the need for reform and competition in developing countries as well. However, there are fundamental differences between the two cases regarding the maturity of the ESI structure, economic priorities, and the role of the state in development. This paper, therefore, synthesizes a model of reform that is sensitive to these realities. Consequently, the outlook is different from the prevailing tendency to simply transpose experience from elsewhere. The core issue that we identify is the approach to the transmission system. Thailand, since it is of medium size and reform oriented, is used as the main reference point, but short sections on Sri Lanka and China are included to widen the relevance of the discussion.