Electricity Markets and Energy Policy

In the paper we study the relationship between electricity market structures and energy policies in a liberalized market-oriented institutional setting. We analize a theoretical liberalized electricity market distinguishing between four miodel that represent different levels of liberalization, from a vertically-integrated monopoly to the fully unboundled market-oriented setting, highlighting the constraints that uncertainty, information asymmetries and market rigidity impose to the defiition and adoption of the proper rules. It is argued that both taxation policies and certificates markets can be coherent with second-best energy policies targeted to modify the generation mix and enhance efficiency.