This report contains three sections, one each for Electricity Deregulation, Gas Deregulation and Water Deregulation. The characteristics of each market and its liberalisation are quite different and they need to be treated separately. Gas differs in that it is confined to 73 countries which use or produce natural gas, whereas electricity and water are available in all countries, although not necessarily supplied by utilities to all people.
The nature of water provision and regulation is different from the two energy sectors because many people perceive it as a natural entitlement and in some countries it is even provided free of charge to the consumer, the cost of provision being absorbed out of general taxation, to which some of the poorest consumers may not contribute.
Gas and electricity differ from each other in that gas is primary energy and electricity is secondary energy after transformation from a primary source of energy, one of which is natural gas. Historically, the electricity sector has had a far greater involvement by the state than gas, which has been more dependent on private investment. The nature of privatisation varies. Privatisation as defined by the World Bank includes private sector involvement in financing, operating and, in some cases, ownership of assets. Privatisation of electricity utilities usually involves unbundling the assets into generation, transmission, distribution and supply. These are then sold as operating companies including the assets.
Gas is less complicated because most gas companies have only one activity, they either produce gas, transport it or distribute in. In each case the energy is generally accepted as a commercial commodity. Water and waste privatisation is quite different in most cases.
In many countries the law does not permit sale of the assets but it usually allows subcontracting of operation to commercial operators. Privatisation of a water/waster utility usually involves the sale of a concession or an operational management contract. There are many legal forms of this process.