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2018 | OriginalPaper | Buchkapitel

4. Effectiveness of Regulation: An Investigation of the Turkish Natural Gas Distribution Market

verfasst von : Okan Yardimci, Mehmet Baha Karan

Erschienen in: Energy Economy, Finance and Geostrategy

Verlag: Springer International Publishing

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Abstract

In this chapter, the effectiveness of regulation in the Turkish natural gas distribution sector is investigated by examining EMRA’s implementations and the performances of the companies. The analyses were taken into account mainly in the context of the effectiveness of regulation rather than in drawing conclusions with respect to economic paradigms, like market failure. The important regulations with regard to the Turkish natural gas distribution sector were analyzed within the scope of the differences between the various planned and recognized situations. Thus, it was understood that some of the regulations did not produce effective results. Particularly the comparison between private and state-owned companies concerning their performances and R&D expenditures revealed the alienation experienced from the expected benefits of liberalization. The regulations to encourage sector development and cost reduction through R&Ds have not been properly implemented. The obtained results are considered as partially regulatory failure.

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Vorheriges Kapitel System Dynamics Simulation to Explore the Impact of Low European Electricity Prices on Swiss Generation Capacity Investments

Nächstes Kapitel The Crowding-Out Effect of Green Energy Innovation

If the storage capacity is insufficient.

These companies will be named as ‘existing companies’ in the following parts of the study.

The companies that have endorsed license by a tender will be named as ‘tendered companies’ in this study.

Istanbul Natural Gas Distribution Company

According to Demsetz it can be positive windfall or negative windfall.

The “Pareto efficiency”, taken the name from the famous Italian economist Vilfredo Pareto, can be described as the highest level of efficiency where it is not possible to improve the condition of someone else without worsening the condition of any one. Nobel prize-winning economist Joseph Stiglitz explains the “Pareto activity” as follows: “... the ‘Pareto activity’ is provided only when there is no chance of improving his situation without deteriorating the situation of anyone else” (Stiglitz 2009; p. 11).

This is the goal of the Natural Gas Market Law expressed in the Article 1.

Assuming that the annual income to be obtained by the company in the framework of the regulation economy is 100 million USD and that company can increase its income to 100 million + B amount by spending A amount of money for lobbying. The company will try to realize all situations where A is smaller than B. This is a rational behavior for a company that only acts to maximize its profit. The regulated company may also try illegal ways as well as the above legal way. Undoubtedly, in such a case, the cost of catching and the risk of catching have to be included in the calculation.

A distribution company that operates in the capital city of Turkey, Ankara.

Ratchet effect has a broader meaning as an instance of the restrained ability of human processes to be reversed once a specific thing has happened such as a tendency of people to be influenced by the previous highest level of a factor. In the economics of regulation context, it means hiding or abolishing the efficiency increase by the regulated company in order to survive a disadvantage in the future tariff implementation period.

In a negative way for big consumers in all distribution regions during 8-year period, fixed term. See Table 4.1 for detail.

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Titel: Effectiveness of Regulation: An Investigation of the Turkish Natural Gas Distribution Market
verfasst von: Okan Yardimci
Mehmet Baha Karan
Verlag: Springer International Publishing
Buch: Energy Economy, Finance and Geostrategy
Print ISBN: 978-3-319-76866-3

Electronic ISBN: 978-3-319-76867-0

Copyright-Jahr: 2018
DOI: https://doi.org/10.1007/978-3-319-76867-0_4

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