Search results

Since the liberalization of electricity markets in the European Union, prices are subject to market dynamics. Hence, understanding the short-term drivers of electricity prices is of major interest to electricity companies and policymakers. Accordingly, this paper aims to study movements of prices in the combined German and Austrian electricity market.

This paper estimates an autoregressive model with exogenous variables (ARX) in a two-step procedure. In the first step, both time series, which inherently feature seasonality, are de-seasonalized, and in the second step, the influence of all model variables on the two dependent variables, i.e. the day-ahead and intraday European Power Energy Exchange prices, is measured.

The results reveal that the short-term market is largely driven by seasonality, consumer demand and short-term feed-ins from renewable energy sources. As a contribution to the existing body of literature, this paper specifically compares the price movements in day-ahead and intraday markets. In intraday markets, the influences of renewable energies are much stronger than in day-ahead markets, i.e. by 24.12 per cent for wind and 116.82 per cent for solar infeeds.

Knowledge on the price setting mechanism in the intraday market is particularly scarce. This paper contributes to existing research on this topic by deriving drivers in the intraday market and then contrasting them to the day-ahead market. A more thorough understanding is especially crucial for all stakeholders, who can use this knowledge to optimize their bidding strategies. Furthermore, the findings suggest policy implications for a more stable and efficient electricity market.

Regulatory and institutional changes, restructuring and/or privatization of the erstwhile vertically integrated electricity networks have been adopted by all Sub‐Saharan African (SSA) countries in their pursuit of rural and urban electrification, poverty reduction and economic growth. But advances with the reforms remain limited and the results are at best debatable. The purpose of this paper is to examine the reasons for the unsuccessful implementation of deregulation in Sub‐Sahara electricity markets.

The paper examines the experiences with deregulation of the electricity industries in developed and developing economies and surmises on the factors that have contributed to the success of reforms in some industrialized countries and identifies the factors that have contributed to the failure of reforms in SSA. The “evidence‐based economics” (EBE) methodology is used to analyze the existing models of regulation and their differences particularly as they are practiced in SSA and developed economies. A gap analysis is realized by highlighting the differences between best practices and the existing level of knowledge. Two case studies are analyzed and the collection of information is assessed in a way that is useful for the development and implementation of the most appropriate models of regulation for SSA.

The paper finds that the current trend to the regionalization of the electricity markets in SSA and the creation of regional power pools make possible the creation of a genuine regional electricity market which would provide new opportunities for the adoption and adaptation of more advanced models of regulation (2‐G and/or 3‐G) similar to the ones currently employed by some developed economies in Europe and North America. To do so, regulators in SSA need to adopt a more dynamic approach to regulation.

Given the comparative approach of this paper, it is not possible to prove that SSA countries will succeed in their electricity reforms by adopting the 2‐G and 3‐G regulatory models. Nonetheless, if they do follow the dynamic approach to regulation, as suggested in the paper, their chances to succeed are much better.

The analysis of this paper has major implications for governments, regulators, shareholders, customers and employees of the electricity industry. A better understanding of the reasons for the failure of previous reforms and the identification of major advantages and disadvantages of the electricity markets in SSA provide new opportunities and challenges. The success of the application of the 3‐G model may increase the competitiveness of the electricity industry and productive capacity of Sub‐Saharan countries.

Electricity is an essential input in any industrial and commercial process. Its availability reduces costs, enhances productivity and creates jobs in other sectors. The social well‐being of Sub‐Saharan countries would increase by adopting the 3‐G model suggested in this paper.

To the best of the author's knowledge, there are no recent studies dealing with the same issues particularly for Sub‐Sahara Africa. This paper fulfils the gap that exists in the literature.

Besides organizational changes in the electricity supply industry there are growing concerns about environmental issues derived from the Kyoto Protocol for the reduction of greenhouse gas emissions as well as promoting renewable energies. The purpose of this paper is to address the source side emission trading impact on electricity prices in the competitive power market.

Various schemes are suggested and are being implemented to achieve this objective. It is expected that electricity price will increase due to imposition of emission taxes. This paper analyzes the impact of electricity prices in the competitive electricity markets having a uniform market clearing price mechanism.

It is found that the electricity prices depend on the system loading, generation mix, etc. at a particular hour. Various emission trading instruments are discussed with a special emphasis on the European market.

Block bidding of the suppliers is considered whereas the demand is assumed to be inelastic.

The emission trading impacts are analyzed on a simple example.

This chapter focuses on the common occurrence of wholesale electricity prices that fall below the cost of production. This “negative pricing” in effect represents payment to high-volume consumers for taking excess power off the grid, thus relieving overload. Occurrences of negative pricing have been observed since the wholesale electricity markets have been operating, and occur during periods of low demand, while generators are being kept in reserve for rapid engagement when demand increases (it is expensive and time-consuming to shut down generators and then restart them, so they are often kept in “spooling mode”). In such situations power production may temporarily exceed demand, potentially overloading the system. When the federal government began subsidizing the construction of wind generation projects, with regulations in place requiring transmission grids to accept all of the electricity produced by the wind generators, negative pricing became more frequent.

Midwest Independent Transmission System Operator, Inc. (MISO) is a nonprofit regional transmission organization (RTO) that oversees electricity production and transmission across 13 states and 1 Canadian province. MISO also operates an electronic exchange for buying and selling electricity for each of its five regional hubs.

MISO oversees two types of markets. The forward market, which is referred to as the day-ahead (DA) market, allows market participants to place demand bids and supply offers on electricity to be delivered at a specified hour the following day. The equilibrium price, known as the locational marginal price (LMP), is determined by MISO after receiving sale offers and purchase bids from market participants. MISO also coordinates a spot market, which is known as the real-time (RT) market. Traders in the RT market must submit bids and offers by 30minutes prior to the hour for which the trade will be executed. After receiving purchase and sale offers for a given hour in the RT market, MISO then determines the LMP for that particular hour.

The existence of the DA and RT markets allows producers and retailers to hedge against the large fluctuations that are common in electricity prices. Hedge ratios on the MISO exchange are estimated using various techniques. No hedge ratio technique examined consistently outperforms the unhedged portfolio in terms of variance reduction. Consequently, none of the hedge ratio methods in this study meet the general interpretation of FASB guidelines for a highly effective hedge.

The electric power industry has been moving from a regulated monopoly structure to a deregulated market structure in many countries. The purpose of this study is to comprehensively review the existing markets to study advantages, issues involved and lessons learnt to benefit emerging electricity markets.

The paper employs a comprehensive review of existing competitive electricity market models in USA (California), UK, Australia, Nordic Countries (Norway), and developing country (Chile) to analyze the similarities, differences, weaknesses, and strengths among these markets based on publically available data, literature review and information.

Ongoing or forthcoming electricity sector restructuring activities in some countries can be better designed based on lessons learnt from existing markets and incorporating their own political, technical and economical contexts. A template for design of successful electricity market has also been presented.

This study is limited to a comparative analysis of five markets and can be extended in the future for other existing and emerging electricity markets.

The discussed weaknesses and strengths of existing electricity markets in this study can be practically utilized to improve the electricity industry market structures leading to several social benefits including lower electricity cost.

The comprehensive review and analysis of five existing markets, physically located in different continents, may be used as an assistance or reference guide to benefit the emerging electricity markets in other countries.

The purpose of this paper is to shed light on the governance choices of firms operating in the electricity distribution network operation activities. The study aims to consider both costs and benefits of different governance choices and to examine which of the activities could be outsourced and which it is preferable to keep in‐house. The study makes a distinction between the electricity retail services and electricity distribution network activities and focuses solely on the network business.

The study is based on a four‐staged process and utilizes the extended transaction cost economics as a theoretical framework. The research design includes in‐depth interviews with ten managers and CEOs of Finnish electrical utilities, analysis and interpretation of findings and verification of results by electricity network business experts.

The extended transactional cost economics theoretical framework and research design support analysis of governance structures and make‐or‐buy decisions. The findings demonstrate that the activities of the companies operating in the electricity distribution business differ in terms of potential long‐term efficiency effects when sourced from the market or made in‐house. The determinants of the governance choice depend partly on the nature and strategic importance of the activity in question. Operations management seems to be a function to be kept in‐house in the current market situation, whereas there are clear potential benefits that can be obtained by outsourcing field work activities. The results related to the governance of control room activities are more complicated.

This study brings not only the transaction costs but also the benefit‐side and the dynamic aspects of boundary choices under assessment.

The aim of this paper is to assess the state of spot price convergence between several European electricity day‐ahead markets.

The concept of a fully integrated market is developed through the arbitrage relationship in which spot prices at one location should equal spot prices at another location plus the price of transmission. Accordingly, neighbouring markets are analysed to measure the relevance or their respective interconnecting and transmission constraints. Exploratory data approach is used and results are discussed, namely by correlation analysis.

This paper empirically shows that price differences have decreased during the analysed period, suggesting that integration between markets might be rising. The correlation analysis indicates very few relationships between these continental European power exchanges, what makes us to anticipate continuing difficulties in the building of a single electricity market. Nevertheless, there is some evidence for local integration and some price convergence. Only France and Germany appear to be relatively integrated with higher correlation coefficients, compared to the other cases. In respect to the other markets, this correlation analysis demonstrates that price variations in several locations do not affect prices in the neighbouring locations. Spain appears to be poorly integrated with the other locations as might be expected by its peripheral position and limited cross‐border transmission capacity.

The paper assesses electricity market integration in the context of European Union spot prices and industry structure.