Electric sector deregulation and restructuring in Latin America: lessons to be learnt and possible ways forward

Abstract

The pioneering restructuring and deregulation process of the electricity industry, which started in Latin America as early as 1982, is assessed. Chile and Argentina, among others, have been at the forefront of innovation in the creation of electricity markets. The experience gained and the principal difficulties encountered in these 18 years are reviewed, highlighting the weaknesses and successes of the deregulation processes. A review is made of the challenges and prospects for development of the electrical sector in the region, where energy integration across countries flourishes and world energy players have started acquiring regional utilities. Regulations and market structures are being evaluated, and countries are introducing changes, the danger being that the remedies being considered may be worse than the disease.