Market and public choice
Energy and Economics : public choices and market incentives

The strategic nature of energy, whether oil or electricity more specifically, means that governments cannot rely on the market alone to guide a country's energy and electricity mix. This does not rule out trusting the market to provide financial incentives. But the State has a sovereign power that allows it to :

• impose regulations (strategic oil and gas storage, compliance with environmental constraints);

• to set certain prices for social reasons (e.g. electricity prices to combat fuel poverty);

• guide investment choices through financial incentives (subsidies) and tax incentives (surcharges or exemptions).

The French state is also a regulator, setting the conditions for access to public gas and electricity networks, usually through an independent administrative authority, the CRE (Commission de Régulation de l'Énergie...