What are the effects of vertical integration between electricity generation and supply?
Vertical integration reduces for companies the necessity to trade on wholesale electricity markets, thus potentially hindering the development of liquidity. Vertical integration might not pose a problem per se where there is an actively traded wholesale market giving market participants the convenience to manage their price and volume risks. Vertical integration should give rise to concern where the extent of this phenomenon has a clear foreclosing effect and threatens the operation of independent generation and supply businesses.
