Historical and theoretical approach of Europoean market: How does electricity investment decision evolve with historical context?

In a context of electricity market liberalization in Europe, this paper addresses the issue of investment in electricity generation capacities using a historical approach. Our purpose is to identify past drivers for investors´ decisions on the European electricity market, regarding investments in power generation capacities, and understand how they evolved. We focus on France, in comparison with Germany, United Kingdom, Spain and Italy. The considered period ranges from 1945 up to now. The analysis focuses on two major processes: the constitution of the generation mix (past investment choices), and the European market liberalization (economic context for today´s investors). Major economic theories of the time are confronted to the decisions that were made, analyzing the existence of a gap between rational behavior described by the theory and actual behaviors of investors. In the end, the drivers identified as key are state policy, availability of the resource or technology, and market structure.