Department of Management

Can electricity companies be too big to fail?

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

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Can electricity companies be too big to fail? / Larsen, Erik Reimer; van Ackere, Ann; Osorio, Sebastian.

In: Energy Policy, Vol. 119, 2018, p. 696-703.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Harvard

Larsen, ER, van Ackere, A & Osorio, S 2018, 'Can electricity companies be too big to fail?', Energy Policy, vol. 119, pp. 696-703. https://doi.org/10.1016/j.enpol.2018.05.010

APA

Larsen, E. R., van Ackere, A., & Osorio, S. (2018). Can electricity companies be too big to fail? Energy Policy, 119, 696-703. https://doi.org/10.1016/j.enpol.2018.05.010

CBE

MLA

Larsen, Erik Reimer, Ann van Ackere and Sebastian Osorio. "Can electricity companies be too big to fail?". Energy Policy. 2018, 119. 696-703. https://doi.org/10.1016/j.enpol.2018.05.010

Vancouver

Author

Larsen, Erik Reimer ; van Ackere, Ann ; Osorio, Sebastian. / Can electricity companies be too big to fail?. In: Energy Policy. 2018 ; Vol. 119. pp. 696-703.

Bibtex

@article{a5b208e68b504dd087348ba4f0172cf7,
title = "Can electricity companies be too big to fail?",
abstract = "The 2008 financial crisis has drawn attention to the concept of “too big to fail” companies, more recently relabelled “system-critical” institutions, referring to situations where the actual or near-bankruptcy of a company threatens the future of a service essential to the functioning of society. But such instances are not limited to the financial sector. We argue that if policymakers and regulators are not vigilant, a similar situation could occur in the electricity sector. So far this industry has only experienced occasional problems, but we can observe several precursory signals indicating that these problems might become more frequent. These include a tendency to globalisation in the absence of a supra-national regulator and the disruption caused by large amounts of renewable energies, resulting in companies being stranded with loss-making thermal generators. Still, these units are essential for the electricity supply security. We discuss several cases illustrating these trends. We conclude with a discussion of how electricity regulators and policymakers should approach the “too big to fail” problem, focussing both on preventive measures that can be taken to keep such a situation from occurring and on proactive actions aimed at avoiding a crisis once a system-critical company seems at risk of collapsing.",
keywords = "Electricity, Energy security, Market concentration, “Too big to fail”",
author = "Larsen, {Erik Reimer} and {van Ackere}, Ann and Sebastian Osorio",
year = "2018",
doi = "10.1016/j.enpol.2018.05.010",
language = "English",
volume = "119",
pages = "696--703",
journal = "Energy Policy",
issn = "0301-4215",
publisher = "Elsevier Ltd",

}

RIS

TY - JOUR

T1 - Can electricity companies be too big to fail?

AU - Larsen, Erik Reimer

AU - van Ackere, Ann

AU - Osorio, Sebastian

PY - 2018

Y1 - 2018

N2 - The 2008 financial crisis has drawn attention to the concept of “too big to fail” companies, more recently relabelled “system-critical” institutions, referring to situations where the actual or near-bankruptcy of a company threatens the future of a service essential to the functioning of society. But such instances are not limited to the financial sector. We argue that if policymakers and regulators are not vigilant, a similar situation could occur in the electricity sector. So far this industry has only experienced occasional problems, but we can observe several precursory signals indicating that these problems might become more frequent. These include a tendency to globalisation in the absence of a supra-national regulator and the disruption caused by large amounts of renewable energies, resulting in companies being stranded with loss-making thermal generators. Still, these units are essential for the electricity supply security. We discuss several cases illustrating these trends. We conclude with a discussion of how electricity regulators and policymakers should approach the “too big to fail” problem, focussing both on preventive measures that can be taken to keep such a situation from occurring and on proactive actions aimed at avoiding a crisis once a system-critical company seems at risk of collapsing.

AB - The 2008 financial crisis has drawn attention to the concept of “too big to fail” companies, more recently relabelled “system-critical” institutions, referring to situations where the actual or near-bankruptcy of a company threatens the future of a service essential to the functioning of society. But such instances are not limited to the financial sector. We argue that if policymakers and regulators are not vigilant, a similar situation could occur in the electricity sector. So far this industry has only experienced occasional problems, but we can observe several precursory signals indicating that these problems might become more frequent. These include a tendency to globalisation in the absence of a supra-national regulator and the disruption caused by large amounts of renewable energies, resulting in companies being stranded with loss-making thermal generators. Still, these units are essential for the electricity supply security. We discuss several cases illustrating these trends. We conclude with a discussion of how electricity regulators and policymakers should approach the “too big to fail” problem, focussing both on preventive measures that can be taken to keep such a situation from occurring and on proactive actions aimed at avoiding a crisis once a system-critical company seems at risk of collapsing.

KW - Electricity

KW - Energy security

KW - Market concentration

KW - “Too big to fail”

UR - http://www.scopus.com/inward/record.url?scp=85047116997&partnerID=8YFLogxK

U2 - 10.1016/j.enpol.2018.05.010

DO - 10.1016/j.enpol.2018.05.010

M3 - Journal article

AN - SCOPUS:85047116997

VL - 119

SP - 696

EP - 703

JO - Energy Policy

JF - Energy Policy

SN - 0301-4215

ER -