SCALE ECONOMIES IN THE ELECTRICITY POWER PRODUCTION: THE CASE OF THE BRAZILIAN UTILITIES

摘要

The existence of economies of scale in the transmission and distribution segments of the electricity market is by now largely acknowledged. However, such a consensus does not prevail for utilities operating in the segment of power generation. Since the seminal paper by Christensen and Greene (1976), other studies claimed that economies of scale may not prevail in power generation and/or are exhausted at a much smaller scale. Indeed, most of the restructuring in the electricity industry is based on the assumptions that the generation operates under constant or decreasing returns to scale at current levels of production (Wolak, 1995). Therefore, the biggest firms may not detain significant cost advantages over the smaller ones thus making this segment more prone to competition (Huettner and London, 1977; Arocena and Price, 2002; Goto and Tsutsui, 2008).