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Coordination Mechanisms for Accommodating Increasing Amounts of Wind and Solar in the Power Market

November 4th, 2014 by Jacques de Jong, Clingendael International Energy Programme

European power markets are being confronted with an unprecedented transition process toward a low-carbon power system. The speed and complexity of this shift are raising serious challenges and operational difficulties. The successful increase in the deployment of variable renewable electricity technologies is bringing the EU objective of raising the share of these technologies in its energy mix to 20% by 2020 closer to an attainable reality. But there are deep concerns about the continuing impacts of this transition, especially as it is further expanded to include a substantially larger share of renewables by 2050.

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Seamless power markets

October 22nd, 2014 by Manuel Baritaud, Senor Analyst at the IEA

In order to better integrate their electricity markets, regions must first have confidence that when push comes to shove during times of capacity scarcity, their neighbours will continue work with them, and not against them. That means paying more attention to the rules for security of electricity supply. If you can’t count on your neighbours in times of need, you want to make sure that you have enough steel on the ground in your own jurisdiction. But with this kind of mindset, markets can’t just function properly.

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Remember back when everybody hated electricity deregulation?

October 8th, 2014 by James Bushnell, University of California at Davies

A brief post concerning electricity restructuring that looks back over the last 20 years. Around that time I started giving a talk titled “If electricity restructuring is so great, why does everybody hate it?” Back then, several states like Illinois and Maryland were actively pursuing options to “re-regulate” markets that they had at least partially restructured.
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Paying for kWh, kW or km?

September 8th, 2014 by Claude Crampes, Toulouse School of Economics

Traditionally, the distribution charge paid by consumers of electricity connected to a grid is based on the capacity for which they subscribe and the number of kWh withdrawn during a given period. Energy consumption is however actually a poor approximation of the willingness to pay for being connected. Additionally, except for thermal losses, the cost incurred by distribution system operators (DSO) does not depend on the quantity transported. The main raison d’être of the kWh index is that it is indispensable for producers and suppliers. Since it is an existing gauge provided by installed meters, why not use it for distribution? Continue reading »

Extending the life of ageing nuclear reactors could help bridge the energy gap

June 6th, 2014 by William Nuttall, Professor at Open University

Changing the rules by which nuclear power stations are judged to be safe or not may sound unpalatable to some, even outright dangerous. But this is what the Office of Nuclear Regulation is considering in order to extend the life of Britain’s ageing reactor fleet. Rest assured, however, such things are done carefully. Continue reading »

Money for Nothing

May 14th, 2014 by Severin Borenstein, Haas Business School, UC Berkekey

Since the beginning of electricity grids, demand has fluctuated and supply has been made to follow along. But for decades, economists and some grid engineers have dreamed of having demand play a more active role in balancing the system. With increasing use of intermittent renewable energy resources, now is the time to make that demand-response dream come true. But we can only get there if we clear up a common misconception in the world of electricity policy.
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European Electricity Prices Rising

April 23rd, 2014 by Fereidoon Sioshansi, EEnergy Informer

“European consumers’ electricity and gas prices have risen and are still rising,” is a good summary of a recent report, Energy Costs & Prices in Europe, released by the European Commission in Brussels. Moreover, whilst almost all Member States have seen a consistent rise in consumer prices of electricity and gas, the differences between national prices remain large: consumers in the highest priced Member States are paying 2.5 to 4 times as much as those in the lowest priced Member States.

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Harmonizing electricity TSO regulation: the case of North-West EU

February 16th, 2014 by Jean-Michel Glachant, European University Institute

The study of five EU regulatory regimes for electricity TSOs (Belgium, Germany, Great-Britain, France and the Netherlands) suggests that their designs encompass strong tensions and trade-offs and that they are significantly heterogeneous. However, this heterogeneity should no longer be valid, as the European Union is pushing more than ever to prompt for wider integration and increasing interactions between power networks and power systems. In any regional EU market, the economic properties of national regulatory regimes must consequently be realigned and harmonized as to deliver more EU common good. Continue reading »

Does Europe need a renewables target? – yes, but it should be defined in terms of innovation

February 8th, 2014 by Georg Zachmann, Research Fellow, Bruegel

The discussion on whether the EU needs a new renewables target beyond 2020 is gaining traction. The proponents argue that a target for 2030 would give the visibility needed for long-term investments all along the value chain (e.g. into network and storage infrastructure). That is, without a firm political timetable for the roll-out of renewables, the cost of deployment might be much higher. The opponents of firm deployment targets argue that having such targets under an emission trading system is overly costly (e.g., Robert Stavins) and that artificially high demand is creating excess rents in those parts of the value chain where supply is slow to react.
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European power utilities: under pressure?

January 22nd, 2014 by Koen Groot, Clingendael International Energy Programme

The European power sector is challenged by a series of developments. These range from planned changes to the institutional environment and the functioning of the market, to unforeseen external shocks like the decline of demand as a result of the economic and financial crisis and the German decision to completely phase out nuclear energy after all. The challenges also include the unexpected results of foreseeable developments, such as the impact of renewable energy sources (RES) on business models terms of profit margins and system requirements.
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