Average Electricity Price Research Articles

The Power Delivery System of the Future: A Vital Part of U.S. Energy Policy

ABSTRACT EPRI's Electricity Technology Roadmap describes a pathway to the future which begins with one of the most fundamental of electric functions: getting electricity from the point of generation to the point of use. Power delivery has been part of the utility industry for so long that it is hard to imagine that this process has not already been optimized. However, the power delivery function is changing and growing more complex with the exciting requirements of the digital economy, the onset of competitive power markets, the implementation of modern and self-generation, and the saturation of existing transmission and distribution capacity. A framework for tomorrow's electric future in U.S. energy policy that incorporates the four vulnerabilities already present in today's power system will continue to degrade that power system. The four vulnerabilities are: The security of power delivery and market systems; the quality of power supplied; the reliability of power supplied; and the availability of affordable energy services. Resolving these vulnerabilities will yield benefits in the trillions of dollars annually for an investment of as little as $100 billion. However, numerous science and technology challenges remain before these investments can be made. Only actions taken today to increase the level of research and development will allow the needed developments to evolve. Without careful attention, the enormous benefits which an advanced power delivery system can bring to society will never take effect. Simply stated, today's electricity infrastructure is inadequate to meet rising consumer needs and expectations. Indeed, a sharp decline in critical infrastructure investment over the last decade has already left portions of the electric power system vulnerable to poor power quality service interruptions and market dislocations. Substantial system upgrades are thus needed just to bring service back to the level of reliability and quality already required and expected by consumers, and to allow markets to function efficiently so that consumers can realize the promised benefits of industry restructuring. To assure that the science and technology are available to address the infrastructure needs, The Electric Power Research Institute (EPRI) and the Electricity Innovation Institute (E2I) have initiated an ambitious program. The Consortium for Electric Infrastructure to Support a Digital Society (CEIDS) will build public/private partnerships to meet the energy needs of tomorrow's society. Restructuring and the rise of the digital economy have set electricity price, quality, and reliability on a collision course. The main driving force behind efforts to increase competition in both wholesale and retail power markets was the need to make inexpensive electricity more widely available—in particular, to reduce regional price inequities. Already the effects of deregulation are being seen in the wholesale market, with both prices and price differentials declining rapidly. The effect on retail markets will come more slowly, but over the next twenty years, the average real price of electricity in the U.S. is expected to fall buy 10 percent for residential customers, 17 percent for commercial customers, and 14 percent for industrial customers. At the same time, however, industry restructuring has not yet provided adequate financial incentives for utilities to make the investments necessary to maintain—much less improve—power delivery quality and reliability. Meeting the energy requirements of society will require applying a combination of advanced technologies—from generating devices (e.g., conventional power plants, fuel cells, microturbines) to interface devices to end-use equipment and circuit boards. Simply “gold plating” the present delivery system would not be a feasible way to provide the level of security, quality, reliability, and availability required. Neither will the ultimate customers themselves find traditional utility solutions satisfactory or optimal in supplying the ever-increasing reliability and quality of electric power they demand. In addition, new technology is needed if society is to leverage the ever-expanding opportunities of communications and electric utilities' natural connectivity to consumers to revolutionize both the role of a rapidly changing industry and the way consumers may be connected to electricity markets of the future. CEIDS can enable such a transformation and steer the direction for building future infrastructure. CEIDS can create and meet new levels of social expectations, business savvy, and technical excellence by attracting players from the electric utility industry, manufacturers, and end users as well as federal and state agencies. In order to achieve this, CEIDS will be guided by the following key principles: Vision To develop the science and technology that will ensure an adequate supply of high quality, reliable electricity to meet the energy needs of the digital society. Mission CEIDS provides the science and technology that will power a digital economy and integrate energy users and markets through a unique collaboration of public, private, and governmental stakeholders.

Constrained optimal power dispatch for electricity and ancillary services auctions

This paper proposes a constrained optimal power dispatch algorithm (COPD) for electricity and ancillary services auctions. The problem is decomposed into social welfare maximization subproblem which is solved by the mixed integer linear programming (MILP) and real power loss minimization subproblem which is solved by the quadratic programming (QP). The proposed COPD is tested on the modified IEEE 30 bus system with six generator companies (GenCos) bidding to sell the electricity and ancillary services. The social welfare of the proposed competitive electricity and ancillary services price scheme is higher than the competitive electricity price scheme and the constrained down payment (CDP) scheme adopted by the future Thailand power pool, thereby leading to a lower average electricity price. With the spot price including the marginal electricity price and marginal ancillary services prices, the correct price signal could be sent to all market participants. In addition, using the proposed scheme, the individual generator congestion gaming is not effective.

Price caps and investment: long-run effects in the electric generation industry

This paper utilizes a dynamic framework to determine the long-run effects of price caps on electricity generation investment and spot prices. The results show that the effects of spot market price caps differ significantly based upon the market structure. In a social welfare maximization scenario, price caps will not reduce average electricity prices and may actually raise them due to the dynamic affect of price caps on investment. In addition, price caps may reduce overall investment levels and result in welfare losses if the independent system operator is forced to shed load. Therefore, since social welfare maximization will approximate a competitive outcome, the results imply that price caps should be avoided in competitive markets. In contrast, for the monopoly producer, price caps produce an indeterminate effect on overall investment, and unequivocally lower average prices, which are otherwise unbounded. Therefore, price caps are necessary to prevent unlimited price markups.

The Origins of Electricity Regulation: Revisiting an Unsettled Topic

While the electricity industry is currently experiencing a regime shift from state regulation to competitive markets for generation, a number of questions regarding the change in regulatory environment in the electricity industry during the beginning of this century remain unsettled. This paper revisits some of these issues. Specifically, the paper tests the validity of the two most commonly suggested reasons for the origin of state regulation in the electricity industry. Using Census data gathered on the electricity industry during the beginning of this century, the paper models the decision to adopt state regulation as a function of the average electricity price and profit rate in the state. The results cast doubt on the commonly accepted justification that state regulation was passed to limit competition and increase the profits of electricity firms, but do not unilaterally support the public interest view, either. The paper then draws on trade publications to assess the industry's mindset during this period. Literature from the National Electric Light Association suggests that although some industry leaders supported state regulation in order to rid themselves of corrupt local politicians, the industry did not unilaterally support increases in regulation.

Energy-efficient lighting in Thai commercial buildings

We explore the opportunities to reduce the electricity required for lighting in prototypical Thai offices, hotels, and shopping centers. Using a whole-building energy analysis approach, we calculate the savings from lighting conservation measures directly, and from associated reductions in cooling load. Ancillary cost savings of air-conditioning energy and capacity comprise a significant 30 to 50% of the total. Lighting technologies considered in this study include electronic ballasts; tri-phosphor, narrow-diameter lamps; specular reflectors; occupancy sensors; lumen maintenance and daylighting controls; and compact fluorescent lamps. From a societal economic perspective, the cost of conserved energy of employing all applicable lighting conservation measures to these buildings is one-quarter or less than the average retail price of electricity for commercial customers, with a payback time of less than one year in hotels and retail buildings and approximately three years in offices. The internal rate of return for installing all lighting measures is 35% in offices, 142% for hotels, and 107% for shopping centers. Several current policy initiatives in Thailand, including a proposed energy standard for commercial buildings, with specific provisions for lighting, and plans by the nation's electric utility to develop two commercial sector conservation programs, should help to spur the adoption of more efficient lighting products. We strongly recommend that the currently high tariffs and taxes (50% and greater) for imported efficient lighting products be reduced.

The dynamics of electricity use in Scandinavian households

We compare changes in the structure of residential electricity use in Denmark, Norway, and Sweden since the early 1970s. A major distinguishing feature among these countries has been consistent differences in the average residential price of electricity. We reach three important conclusions: (1) when the saturation of household appliances reaches maturity, it is only changes in space and water heating uses of electricity which can cause significant change in the intensity of electricity use in the residential sector. (2) The efficiency of household electricity use is strongly influenced both by domestic technologies and policies (e.g., housing standards), as well as by international manufacturers (e.g., of lighting equipment, windows, and household appliances). (3) The behavior of household occupants plays a key role in determining the intensity of electricity use, both through their demand for the services electricity provides and through their choices of equipment. Relative electricity prices have strongly influenced the choices of policy makers, consumers and equipment manufacturers in this sector. These conclusions suggest that pricing policies and improved technology offer potential for reducing residential electricity use in Scandinavia through greater efficiency and fuel substitution.

Demand for electricity in Nigeria: Some empirical findings

This paper presents the findings from an econometric model of Nigerian electricity demand. Electricity consumers are partitioned into three classes-namely. Residential, Commercial and Industrial. It shows that over the last two decades there has been tremendous increase in both the supply and demand for electric energy. Although supply has increased, it has not been able to keep pace with demand. Various explanatory variables that determine changes in demand are analysed for each of the three consuming sectors. The findings are as follows. (i) Per capital income, previous level of electricity consumption and urbanization are the most significant explanatory variables for the Residential sector's electricity consumption. The short and long-run income elasticities are found to be below unity, while whose of urbanization are above unity. The average price of electricity, though rightly signed, was found to be insignificant. (ii) As regards the commercial sector, the significant explanatory variables were previous level of electricity consumption, income, average price of electricity and urbanization. Urbanization was, however, found to be the most sensitive variable in respect to changes in the sector's electricity demand. (iii) Previous level of industrial electricity consumption and degree of urbanization were the main explanatory variables for changes in the Industrial sector's demand for electricity. Industrial output and income were not found to be significant variables in explaining changes in the Industrial sector's demand for electricity.

The Economics of Utility Residential Energy Conservation Programs: A Pacific Northwest Example

The bottom line for any utility conservation program is its overall worth: whether program costs are justified by the value of the electricity savings. That is, are these programs worthwhile investments to utility customers that participate in the programs, customers that do not participate, the utility system, and society as a whole? How sensitive are estimates of program worth to the input parameters (program-induced energy savings, discount rates, future average and marginal electricity prices)? This paper discusses our assessment of program benefits and costs for the Bonneville Power Administration (BPA) Residential Weatherization Pilot Program. Unlike other assessments, the present work is based on a detailed empirical evaluation of the program. We collected enough data from both program participants and nonparticipants to analyze the actual energy savings that could be attributed to the BPA program. We also obtained information on actual program costs. This information was used to compute the Net Present Worth (NPW) of the program from the perspectives of program participants, the BPA power system, and the Pacific Northwest region as a whole.

Les petites installations hydroélectriques dans les pays industrialisés

Les petites installations hydroélectriques dans les pays industrialisés

Echo sounding apparatus

This is the first study to investigate and quantify the extent to which the 2015 reform has already impacted the economic and technical performance as well as the security of supply of China's electricity sector. We use provincial data from 2003 to 2018 to estimate the impacts of the reform on on-grid prices, average retail electricity prices (including those for households) and supply reliability. We adopt fixed effect models together with other dynamic panel data models. We find that the 2015 reform has already had a negative impact on on-grid prices of electricity generated from thermal energy and on overall average retail prices, but the impacts on other prices are not statistically significant. Our results also suggest that the 2015 reform has significantly induced improvement to technical efficiency, as measured by the coal burned per unit of thermal generation, but no impact on the line loss rate of electricity transmission. In addition, our empirical analysis suggests that the 2015 reform has reduced reliability and increased the instances of supply interruptions. These results are robust to different estimators and models. Finally, the effect of the reform is heterogeneous across regions. Our findings suggest that additional steps are needed to further improve the overall economic efficiency of the electricity sector in China, despite significant progress arising from the 2015 reform. The results may also provide useful lessons for other developing economies aiming to reform their power sectors and who are facing similar choices between the roles of the state and the market in ensuring efficient outcomes.