Computable equilibrium models and the restructuring of the European electricity and gas markets

Perfect competition equilibrium models were used in assessing the deregulation of the electricity and gas sectors in the European Community. Results found that this kind of paradigm is not relevant for ex ante assessments of new legislation and regulation but is useful for the ex post analyses of the market reorganization. The perfect competition model is easy to implement, offers an excellently designed framework for data gathering, and allows for an understandable expression of equilibrium conditions. Finally, numerical treatment of perfect competition models is not difficult. Other models also have potential for assessments.