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Thinking About the Future

System Dynamics and the Process of Electricity Deregulation

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Energy Policy Modeling in the 21st Century

Part of the book series: Understanding Complex Systems ((UCS))

Abstract

When an electricity sector in a country becomes deregulated, companies in the sector face an uncertain future. The transition from being a monopoly to a “commercial” company is often difficult and dangerous for the organization. In this situation, a company requires internal changes that are as big as those seen in any industry. The risk in the external environment is perceived as major, as competitors might enter the industry, customers might leave the company, and financial markets might make demands before money can be raised, etc., issues that were not part of the industry before deregulation. Furthermore, the regulation itself will most likely change significantly and become more confrontational. In this chapter, we discuss these three areas of risk that a deregulated company faces: regulatory, market, and organizational risks. We also discuss one of the methods that might help companies, System Dynamics, which with its focus on lags and feedback is well suited to help managers make sense of their new industry.

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Author information

Authors and Affiliations

  1. Institute of Management, University of Lugano, Via Buffi 13, 6900, Lugano, Switzerland

    Erik R. Larsen

  2. Faculty of Mines, Universidad Nacional de Colombia, Carrera 80 # 65–223, Bloque M8a, Medellin, Colombia

    Santiago Arango

Authors
  1. Erik R. Larsen
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  2. Santiago Arango
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Corresponding author

Correspondence to Santiago Arango .

Editor information

Editors and Affiliations

  1. School of Administrative Studies, York University, Toronto, Ontario, Canada

    Hassan Qudrat-Ullah

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Larsen, E., Arango, S. (2013). Thinking About the Future. In: Qudrat-Ullah, H. (eds) Energy Policy Modeling in the 21st Century. Understanding Complex Systems. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-8606-0_2

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  • DOI: https://doi.org/10.1007/978-1-4614-8606-0_2

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