Market Liberalization and Innovation in the Energy Sector: The Case of Belgium and the Netherlands
Market Liberalization and Innovation in the Energy Sector: The Case of Belgium and the Netherlands

Summary/Abstract: Electricity markets in Europe have gone through several rounds of liberalizationreforms since the 1950s and 1960s. In recent decades these reforms have also beenjustified with non-optimal levels of innovation and research and development(R&D) in the energy sector. This article examines the effect electricity-marketliberalizationhas on innovation in the sector and argues that market structure hasan influence on the outcomes of these reforms when R&D and innovation diffusionare considered. This is usually not discussed during policy deliberations concerningelectricity-market reforms. The case studies of Belgium and the Netherlands areused to exemplify the argument. The findings of the paper are relevant to policydiscussions regarding innovation diffusion in the energy sector and the spread ofrenewable energy technologies. Furthermore, the new market context should betaken into account when designing energy-technology policies.

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