The impact of regulation, privatization and competition on gas infrastructure investments

In recent years we have witnessed several reforms in network industries, as privatization, regulatory changes and opening to competition in certain segments of the value chain. In sectors such as electricity and gas, this opening to competition is possible only in certain activities (i.e. generation, storage of natural gas and supply), maintaining as a natural monopoly the activities of distribution and transmission, and therefore still subject to regulation.The performance of these regulated segments can have important effects on the operation of the competitive segments, because the regulated segments (i.e. the transmission and distribution networks) provide the infrastructure platform upon which the competitive activities rely. The motivation of this paper is to evaluate the effects of privatization, liberalization and regulation on investments, as components of the reform of the natural gas sector. An empirical analysis was carried out using a panel data of 11 European countries from 2001 to 2011, with the aim to better understand the determinants influencing investment, thus contributing to a better understanding of the dynamics of this sector and meet the investments needs established by energy policies. © 2014 Elsevier Ltd.