Group items tagged

The European Commission is pushing for the liberalisation of electricity markets as part of a wider attempt to forge an EU energy policy. EurActiv takes a closer look at the liberalisation drive, including power trading and challenges specific to the electricity sector.

These groups have spent a combined $50 million lobbying lawmakers, probably more, according to their own reports to Congress.

A new battle has begun over the next round of energy liberalisation. Commission proposals to complete the EU's internal market for gas and electricity are leaving France and Germany in a quandary, with EDF and E.ON facing either the dismantling of their transmission assets or tight regulatory restrictions.

Under Ofgem's proposals the watchdog has called for an end to this practice and urged suppliers to sign up to the new guidelines and an independent accreditation scheme that would ensure only firms offering "additional" environmental benefits through their green tariffs can market them as green. It also proposes a gold, silver and bronze ranking system whereby tariffs are awarded a different badge based on the amount they invest in delivering these additional benefits.

When a market opening takes place, experts focus their analysis on its macroeconomic consequences: new business framework, economies of scale, investment opportunities, you name it. However, like any other measure of the European Energy Policy, opening of the markets should also deliver environmental benefits, creating a more sustainable energy. I believe that this is the case, and I would like to share with you how, but also hear your comments. 

Ofgem consultation (12 pages, PDF) on a proposed process for examining any request by GB electricity distribution network operators for adjustment to the price controls set in 2004 in respect of deviations from expected costs attributable to specified legislative changes. Responses by Friday 13 June 2008.

This is the third in a series of three blog entries that attempts to explain electricity markets: why regulation was necessary at one time, why it may not be now, and what it means to be an electricity consumer in the wake of deregulation. Part 1 provides the background. Part 2 explains how deregulation works from a consumer’s perspective. Part 3 describes the choices available to deregulated market participants and the near-term outlook for deregulation at the time of this writing (November 2007).

You really can’t equate electricity with an airline trip or a telephone. You don’t have to take that trip. Or not use the phone. We use electricity thoughout our day. Washing our clothes, refrigerating our food, computers, etc. It is pervasive. Some economists say electricity isn't suited to competition because it's needed 24 hours a day and can't be stored, giving sellers too much leverage.

In David Cay Johnston’s article in The New York Times (9/4/2007), “A New Push to Regulate Power Costs,” he writes about the fact that many states are rolling back their deregulatory initiatives. He says, “The main reason, he says, is price.

Have your eyes recently popped out of your head when you opened your electric bill? Do you, like me, live in one of those states where electricity has been deregulated and the state no longer oversees the generation price so your utility rates have skyrocketed since 2002?

Keynes goes further, to explain how economists move from simplifying assumptions to abandonment of the actual facts, and to conclude that reality is what their model says.

This paper examines the incentives that generation firms have in restructured electricity markets for supporting long-term transmission investments. In particular, we study whether generation firms, which arguably play a dominant role in the restructured electricity markets, have the incentives to fund or support incremental social-welfare-improving transmission investments.

“It’s not surprising there’s been little improvement in demand responsiveness given that a series of special rebates, the availability of fixed-term contracts, and the rules governing the behaviour of the Independent Market Operator combined to shield market participants from electricity price increases,”

One can see where the Minister is coming from. Current electricity prices are too low to fund new investment necessary to restore supply security. Average generation prices of around 12 c/kWh are less than half the cost of new coal-fired generation plant. The recently installed turbines, which are keeping the lights on over the Cape winter, produce power at a cost much higher than even the highest industrial tariff.

In summary, the Committee voted overwhelmingly 31-17 yesterday evening to approve the Commission's proposed electricity Directive, but has proposed amendments on the following key issues