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Potential Success Indicators in Early Stages of Energy Liberalization Processes: The Mexican Energy Reform Case.
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
2019 (English)Independent thesis Advanced level (degree of Master (Two Years)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Energy Industry liberalization processes have brought different results around the world depending on the context of the country or region where they take place. The Mexican energy reform opened the market for private companies to participate in the electricity generation. Currently, this reform has been in place for almost four years.

Several approaches have been used to measure the success of the electric market liberalization in different regions. Different authors have used indicators such as the grassroots initiatives or the reduction of subsidies; still, its applicability is limited to mature stages of the liberalization process.

The Mexican energy reform opens the opportunity to study the liberalization process in its early stages. The present study considers by the approach presented by Tulloch, Diaz-Rainey & Premachandra (2017) proposing four restructuring streams, to overcome to difficulty off evaluating the early results of the reform in an industry still evolving actual company details are studies to assess the success or failure of the liberalization of the Mexican energy sector.

This paper will follow a single case study structure based on the whole Mexican Energy Market and focused on the Electric Market. The case study addresses the following research question: “How implementation indicators reflect the potential success of an energy liberalization processes? This research question aims to find out potential early indicators which can be deemed as determining the success or failure of the energy market liberalization process. By using the Mexican case, we aim to contrast the existing research and experiences in other countries to further understand the dynamics of energy liberalization processes.

The energy market in Mexico has experienced growing competition from players in the energy sectors and forms of energy exploited both producing positive effects on the utility companies’ profitability. The market has also seen an increasing share in renewables, increased power generation and an increasingly greater focus on innovation in the energy sector. The results point to the complexity of the energy market and the role that specific market characteristics play in the success or failure of the regularization process.

Considering the empiric results, we identify early success indicators such as the introduction of new competitors and the boost of renewable energy, pointing towards a successful energy liberalization process in Mexico.

Three early indicators are proposed to be used to identify a successful energy liberalization process: i) the introduction of new competitors, ii) reforms on subsidies and iii) the growth of renewables. The co-existence of all of these indicators during the implementation of an energy liberalization process suggests that it was performed successfully, at least at its early phase.

The Mexican experience gives us first-hand experience in the early phases of an energy liberalization process. It is clear according to the empirical results that without the successful implementation of the energy reform, the Mexican market would not be able to incorporate such technologies at the current pace.

Further research is required to confirm the current findings in later stages and through different industries. Considering that the market conditions are continually evolving and that the current conditions might be undeveloped, the profit levels of these company might suffer drastic changes during the following years. Other aspects such as the subsidy levels and the electricity price performance represent additional research paths.

Place, publisher, year, edition, pages
2019. , p. 41
Series
Blekinge Tekniska Högskola Forskningsrapport, ISSN 1103-1581 ; 1
Keywords [en]
Energy Liberalisation, The Mexican Energy Reform, Energy Reforms
National Category
Business Administration Economics
Identifiers
URN: urn:nbn:se:bth-17479OAI: oai:DiVA.org:bth-17479DiVA, id: diva2:1277261
Subject / course
IY2578 Master's Thesis (60 credits) MBA
Educational program
IYABA MBA programme
Presentation
2017-10-02, 21:04 (English)
Supervisors
Examiners
Available from: 2019-01-10 Created: 2019-01-10 Last updated: 2019-01-10Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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