Forms of Concentration in the Energy Sector

The research indicates that the merger of smaller competitors is unlikely to result in the exclusion of other companies from the market. Nevertheless, it is crucial to acknowledge that there are specific exemptions, especially when the merger takes place between multinational companies. In such circumstances, there is still a potential for market exclusion or the existence of undesirable restrictions on competition. In circumstances where a natural gas business lacks a dominant market position but controls key infrastructure such as transmission networks and natural gas storage facilities, it is possible that market restraints may be present. We anticipate that this course of action will result in foreclosure. The problem worsens when these companies form long-lasting gas supply contracts with energy producers, which are crucial for generating electricity. This scenario witnesses’ foreclosures and decreased competition in the energy and gas markets. Therefore, it is imperative to establish mechanisms that provide equitable and impartial access to the natural gas transmission networks. In markets characterized by oligopoly or monopoly, the merger of a dominant company is likely to lead to a reduction in market competition. The merger results in the removal of competitive dynamics among the involved enterprises.