Many governments aim to reduce the dependence on coal-fired generation to decrease carbon emissions. At the same time power markets with competition between independently operating power firms have been created which leave the actual decisions concerning electricity production to these firms. This paper analyzes the interaction between climate policies and policies to foster power markets….
Balancing between competition and coordination in smart grids – a Common Information Platform (CIP)
The commercial value added in electricity distribution networks and smart grids is increasing. Concerns about competition on a level-playing field are raised. The debate on vertical network unbundling is reaching the distribution networks. Primary driver for this discussion is the requirement to exchange information in smart grids in a neutral and non-discriminatory way. Against the…
Security of Supply, the Role of Interconnectors and Option Values : insights from the GB Capacity Auction
The UK Government has carefully designed a Capacity Mechanism to deliver reliable electricity. This paper criticises the determination of the amount to procure, and argues that the amount set for the first auction was excessive, particularly (but not exclusively) in ignoring the contribution from interconnectors. Too little attention was given to either the political economy…
Irish and British electricity prices: what recent history implies for future prices
This paper compares retail and wholesale electricity prices in SEM, the market of the island of Ireland, and BETTA in Great Britain. Estimated wholesale costs are much lower in BETTA. We show that this is mostly because the wholesale price in BETTA is set too low to cover generation costs, although it is compensated by…
Taxing Energy Use in the OECD
This article compares effective tax rates, in energy and carbon terms, on the full spectrum of energy use across the OECD, highlighting notable differences in the taxation of energy in OECD countries. The analysis strongly suggests that current taxes are not well geared towards attaining environmental, budgetary and distributional policy objectives. Incoherencies from an environmental…
An Extended Analysis on the Remuneration of Capacity under Scarcity Conditions
This paper extends a recent analysis which investigated the impact of scarcity adders produced by operating reserve demand curves on the financial viability of generation units in the Belgian market. Our paper is inspired by practical considerations related to the implementation of the mechanism in European electricity markets. We are specifically interested in: (i) the…
Macroeconomic Impacts of the California Global Warming Solutions Act on the Southern California Economy
We evaluate the potential regional macroeconomic impacts of a set of ten greenhouse gas mitigation policy options intended to enable the Southern California Association of Governments to comply with the State’s greenhouse gas reduction targets. The Regional Economic Models, Inc. Policy Insight Plus Model, was applied in the analysis by carefully linking technical and microeconomic…
Book Reviews
Energy Reforms and Consumer Prices in the EU over twenty Years
To what extent have the European households benefited from the energy reforms of the last two decades in the EU? The core ingredients of change have been, in different proportions and timing across countries: privatization of formerly state-owned enterprises, unbundling of networks, market liberalization and regulation. This paper summarizes some empirical findings of a team…
New Alignments? The Geopolitics of Gas and Oil Cartels and the Changing Middle East
The ongoing democratic movements and civil wars in the Middle East have challenged the stability of regimes across the region. On the other hand, the commercial exploitation of large reserves of unconventional oil and gas in the United States is poised to significantly change the current equilibrium in energy markets. What are the implications of…