Electricity Prices For Consumers Research Articles

A Machine Learning Frontier for Predicting LCOE of Photovoltaic System Economics

In this research article, the objective is to determine the return on investment (ROI) of photovoltaic (PV) power plants by employing machine learning (ML) techniques. Special focus is done on the levelized cost of electricity (LCOE) as a pivotal economic parameter crucial for facilitating economic decision‐making and enabling quantitative comparisons among different energy generation technologies. Traditional methods of calculating LCOE often rely on fixed singular input values, which may fall short in addressing uncertainties associated with assessing the financial feasibility of PV projects. In response, a dynamic model that integrates essential demographic, energy, and policy data, is introduced encompassing factors such as interest rates, inflation rates, and energy yield, which are anticipated to undergo changes over the lifetime of a PV system. This dynamic model provides a more accurate estimation of LCOE. The comparative analysis of ML algorithms indicates that the auto‐regression integration moving average (ARIMA) model exhibits a high accuracy of 93.8% in predicting consumer electricity prices. The validation of the model is highlighted through two case studies in the United States and the Philippines underscores the potential impact on LCOE values. For instance, in California, LCOE values could vary by nearly 30% (5.03 cents kWh−1 for singular values vs 7.09 cents kWh−1 using our ML model), influencing the perceived risk or economic feasibility of a PV power plant. Additionally, the ML model estimates the ROI for a grid‐connected PV plant in the Philippines at 5.37 years, in contrast to 4.23 years using traditional methods.

Impact of the feed-in-tariff exemption on energy consumption in Japanese industrial plants

To promote renewable energy deployment, Japan introduced a feed-in tariff policy in 2012, financed through a surcharge on electricity prices for consumers. The Japanese government also offered a discount system for electricity-intensive industrial plants, exempting them from paying full surcharges. Using monthly plant-level data from 2005 to 2018, this study evaluated the exemption system’s impact on electricity and fossil fuel consumption for plants in the iron and steel, chemical products, and pulp and paper sectors. Our results show that the exempted iron and steel plants decreased electricity purchase and consumption 18.62% and 17.88% after 2017, respectively. This decrease is attributed to the introduction of an electricity efficiency after 2017. It is worth noting, however, that the revision of the scheme did not affect the chemical, pulp and paper sectors. In this sense, a stronger efficiency requirement might be warranted to ensure the decrease in electricity consumption for all sectors. Nevertheless, we estimate that roughly 7 million tCO2 have been avoided thanks to the decrease in electricity consumption in the iron and steel sector.

Analysis of Clean Development Mechanism for Dernah Wind Farm (I) Project (Libya) by Using AM0019 Methodology

Since the Kyoto Protocol came into effect on Feb 16, 2005, the Clean Development Mechanism (CDM) has experienced significant global growth. This mechanism enables developing countries to actively engage in combating climate change by implementing projects aimed at reducing Greenhouse Gas Emissions (GGEs). In 2010, Libya established the Commission of the Designated National Authority (DNA) to oversee the implementation of the CDM. This move was made as part of Libya's efforts to develop a range of projects that qualify for CDM and contribute to reducing GGEs. The main motivation for conducting this study was the absence of Libya's involvement in global-level CDM projects, as evidenced by the United Nations Framework Convention on Climate Change (UNFCCC) annual reports. Additionally, the failure to recognize the significance of CDM in influencing decisions regarding investments in wind energy. This work aims to investigate the use of CDM in Dernah wind farm (I) project (Libya). The study used a suitable CDM methodology, AM0019 with the appropriate tool (03-V3), calculated as CO2 reductions and Certified Emission Reductions (CERs).
 The results of CDM analysis are as follows: CO2 reductions = 362,201.82 tCO2e/year and CERs for the first ten years of the age of the proposed wind farm (Dernah Wind Farm (ɪ)) (CERs10y) = 1,687,898,590 LD (320,838,371.8 €) for the first ten years, likewise CERs20y= 3,375,797,180 LD (641,676,743.5 €) during the entire life (20 years) of the proposed wind farm. Based on these results, it can be concluded that the project will be highly cost-effective, this will lead to lower electricity prices for consumers and higher profits for the project owners. Therefore, registering wind energy projects as CDM projects and earning CERs is the most practical way to promote wind energy. The findings of this study could be valuable for policy makers and project developers who are interested in CDM wind projects.

Future-proof electricity prices for consumers

European electricity systems are undergoing unprecedented changes in response to the profound transformation of our modes of production from fossil fuels to decarbonised energy, to our shift to electricity for heating and transport, the emergence of decentralised energy sources (e.g. solar PV on the rooftop), and to the gas crisis we face. In response, the price formation and signals sent by both the electricity markets and the networks are changing, too. This article summarizes how the energy transition and the latest developments in the energy market affect prices and what policies and regulations can be introduced to keep energy consumption affordable.

Do increased cross-border flow and greater competition in the market lead to lower electricity prices for end-consumers?

For our research, which aims to provide another approach to assessing the development of the retail electricity market in the EU, we tested the hypothesis positing that increased cross-border flow and greater competition in the market lead to lower electricity prices for end-consumers. To verify the hypothesis, we collected data on electricity imports and exports between 2010 and 2018 and data on real electricity prices in retail markets in all EU member states. Data on prices were obtained for the period between 2010 and 2019. We also used real electricity prices for consumers in the retail markets of EU member states collected at the EU level by Eurostat, whereby as a price deflator we used the harmonised index of consumer prices. Applying regression analysis and descriptive statistics,we verified whether the cross-border flow, i.e., electricity imports and exports, and greater competition in the market lead to lower real electricity prices for end-consumers. After examination, the hypothesis was rejected. However, our research resulted in interesting findings and reflections outside the established economic frameworks.

High Taxes on Cloudy Days: Dynamic State-Induced Price Components in Power Markets

State-induced components constitute the major share of electricity prices for consumers and are generally charged at a fixed rate. We analyze the benefits of charging state-induced price components at time-varying rates instead, especially with regard to the integration of variable renewable energy (VRE) sources and to decarbonization. For this purpose, we apply a detailed power market model that puts particular emphasis on electricity demand and how it is sensitive to prices.For a quantitative case study, the model is parametrized to represent a German energy system with an 85% share of renewables in its power generation. We find that dynamization has a reducing effect on integration costs of VRE, ranging from 0.3 to 3.4 €/MWh. Furthermore, strong distributional effects in favor of flexible consumers can be observed.

Decision-making Optimization of Procurement and Sale Strategies for Power Sales Companies Considering Virtual Power Plants

Introduction The electricity sales company faces the fluctuation of electricity price in the spot market of the wholesale side and the uncertainty of the demand power of the retail side. In order to balance the benefits and risks， it is necessary to determine a reasonable proportion of electricity purchase in the medium and long-term market and the spot market and the time-of-use electricity price for consumers. Method The demand price response curve was used to simulate the contesting of electricity sales companies in the medium and long-term contract market， and a quantitative method of transaction risk loss index based on conditional value at risk （CVaR） was proposed. Result The demand response based on virtual power plant is realized through flexible load and distributed power generation， so as to balance the power deviation and the risk of price fluctuation in the spot market. On this basis， a two-level optimization model considering the power purchase strategy of electricity sales companies in the wholesale side market and the revenue of power selling on the retail side is established， and the crisscross optimization algorithm is used for solving the problem. Conclusion The simulation results show the effectiveness of the method.

Ensuring the Economic Competitiveness of Small Green Energy Projects

Small green energy projects are considered an important tool to help poor people achieve sustainable development goals. However, green projects' economic results do not always compete with the traditional energy business. The main reason is the imperfection of the existing renewable energy technologies and the comparatively high energy generation cost with their help. The example of Ukraine, which significantly depends on fossil fuel import and develops renewable energy with state support, shows that green energy competitiveness problems exist within the overall energy market, i.e., convenient energy technologies. The key barriers to increasing the competitiveness of small green energy projects are the lack of available financial resources, the inconsistency of state energy policy, energy pricing gaps, etc. These factors significantly inhibit the spread of green energy technologies in the domestic economy. The competitiveness assessment of the renewable energy business model on the example of a private rooftop solar photovoltaic power plant has proved that green energy generation is available to every household and small business owner and is economically profitable due to existing government support mechanisms. Today, there is no competition in the Ukrainian renewable energy market, so creating a business in this field is relevant. In the long run, competitive green energy projects will provide reasonable electricity prices for consumers and profits for energy producers and stimulate the energy sector's decarbonization. Further directions for improving public policy in the green energy industry are continuing energy pricing reforms, expanding energy efficiency programs focusing on demand management, creating new jobs, and increasing investment in renewable energy sources to ensure energy security and greenhouse gas emission reduction.

Electricity demand management within the retail electricity market in Russia

Demand side management is an important tool for ensuring the flexibility of the electric power systems, as it maintains and regulates the balance of generation and consumption of electric energy and has a system-wide effect, which is formed by lowering electricity prices for consumers and optimizing the load and structure of generating and electric grid capacities. The article is devoted to the problem of managing the demand for electricity consumption within the framework of the retail electricity market in Russia. The author identifies and summarizes the existing demand management tools. The article substantiates the need for the development and implementation of innovative tools and mechanisms for managing the demand for electricity consumption.

Electricity Portfolio Optimization for Large Consumers: Iberian Electricity Market Case Study

Electricity markets are nowadays flooded with uncertainties that rise from renewable energy applications, technological development, and fossil fuel prices fluctuation, among others. These aspects result in a lumpy electricity prices for consumers, making it necessary to come up with risk management tools to help them hedge this associated risk. In this work a portfolio optimization applied to electricity sector, is proposed. A mixed integer programming model is presented to characterize the electricity portfolio of large consumers. The energy sources available for the portfolio characterization are the day-ahead spot market, forward contracts, and self-generation. The study novelty highlights the energy portfolio characterization for players denoted as large consumers, which has been overlooked by the scientific community and, focuses on the Iberian electricity market as a real case study. A multi-objective methodology is explored, using a weighted-sum approach. The expected cost and the conditional value-at-risk (CVaR) minimization are used as objective function. Three case studies illustrate the model applicability through the characterization of how the portfolio evolves with different demand profiles and how to take advantage from seasonality characteristic in the spot market. A scenario analysis is explored to reflect the uncertainty on the price of the spot market. The expected cost and CVaR are optimized for each case study and the portfolio analysis for each risk posture is characterized. The results illustrate the advantage to reduce costs and risk if the prices seasonality is considered, triggering to an adaptive seasonal behavior, which support the decision-maker decision towards its goals.

Modeling of Long-term Operating Regimes of Hydro Power Plants as Part of Energy and Water Systems in the Context of Uncertainty

Energy and water management systems are closely interrelated through the operating regimes of Hydro Power Plants (HPP) or HPP cascades. This is first of all, characteristic of energy systems with a large share of HPP. One of such systems is the energy system of Siberia, which includes the Angara-Yenisei cascade of HPP, the largest in Russia and one of the largest in the world. The studies were carried out on the example of this energy system and the water management system of the Angara and Yenisei basins. A specific feature of the energy and water management systems of Siberia is a significant impact of stochastic factors on their operation. These factors include natural (water inflow in the reservoirs in the spring-summer period and outdoor temperature in the autumn-winter period), and also economic (demand for electric and thermal energy, electricity and heat prices) factors. The paper presents mathematical models for the joint study of energy and water systems. These models factor in the specifics of the systems during planning for a period of up to 1 year. Modeling of the interconnected operation of energy and water systems makes it possible to solve important problems. These are the improvement in the reliability and stability of the considered systems, increase in their economic efficiency (minimization of electricity prices for consumers), assessment and minimization of various risks, prevention from or reduction in possible damages, rational planning of repairs, the formation of fuel reserves at thermal power plants, and others.

Resilience of the Eastern African electricity sector to climate driven changes in hydropower generation

Notwithstanding current heavy dependence on gas-fired electricity generation in the Eastern African Power Pool (EAPP), hydropower is expected to play an essential role in improving electricity access in the region. Expansion planning of electricity infrastructure is critical to support investment and maintaining balanced consumer electricity prices. Variations in water availability due to a changing climate could leave hydro infrastructure stranded or result in underutilization of available resources. In this study, we develop a framework consisting of long-term models for electricity supply and water systems management, to assess the vulnerability of potential expansion plans to the effects of climate change. We find that the most resilient EAPP rollout strategy corresponds to a plan optimised for a slightly wetter climate compared to historical trends. This study demonstrates that failing to climate-proof infrastructure investments can result in significant electricity price fluctuations in selected countries (Uganda & Tanzania) while others, such as Egypt, are less vulnerable.

High Taxes on Cloudy Days: Dynamic State-Induced Price Components in Power Markets

In most European countries, taxes and levies, the state-induced components of electricity prices, constitute the major share of electricity prices for consumers and are charged at a fixed rate. This study analyzes whether switching state-induced price components to time varying rates can support the integration of variable renewables (VRE) and, thus, help to efficiently achieve the overarching goal of decarbonizing the energy system. Based on game theory and linear programming, we introduce a novel simulation model of the power market. For a quantitative case study, the model is parametrized to represent a German energy system that meets the political objective to increase the share of renewables (RE) in power generation to 80% in 2050. We find that dynamization supports the integration of VRE into the energy system. Whether dynamization is an efficient instrument to promote decarbonization as well is highly dependent on the policy framework in place.

Wood-based Bioenergy: An Update for North America with a Focus on Pellets

Over the past decade, renewable energy has accounted for approximately nine percent of the energy usage in the United States. Of this, biomass has consistently been about 50 percent of this, or 4.5 percent of the nation’s total. In Canada, the contribution of renewable energy has been much less with hydro-power being the primary power source. In recent years, the landscape has changed, not so much in domestic demand for wood-based energy, but rather in the arena of manufacturing of wood pellets for export. To a lesser degree, wood-based agricultural-based cellulosic biofuels have become a prominent part of North American policies, programs and even mandates. Wood-based bioenergy is potentially an important integral part of renewable energy portfolios in the U.S. and Canada. The growth of this sector globally has been driven by demand in Europe, Japan, and other countries. European policies have been the driver for a change in the global pellet sector. The goal in Europe of creating a 20 percent renewable energy share of energy consumption by 2020 has created a burgeoning wood pellet manufacturing sector in many countries. The U.S. and Canada have increased pellet production capacity to over three billion tons. The sector is concentrated in the Southern region of the U.S. Demand, again, primarily in Europe, has been driven by the desire to transition to non-fossil fuel energy. However, the reality has been a mix of great anticipation as well as disappointment with where wood fits into the renewable equation. A number of European countries are revising their incentives and subsidies that have allowed the pellet industry to flourish. The incentives are costly and have resulted in high consumer electricity prices in these countries. Currently, the underpinnings of the global renewables sector, particularly wood-based energy, is in a state of instability. This presentation will cover an overview of where wood currently stands in addition to a discussion of successes, challenges, pitfalls, and the overall reality of the future. Keywords: Renewable energy, Bioenergy, Wood pellet

Adding More Juice: How Private Investors Can Improve the Performance of Provincial Power Assets

Consumers would likely enjoy lower power bills if provincial governments welcomed more private investment in electricity utilities, according to a new report from the C.D. Howe Institute. In “Adding More Juice: How Private Investors can Improve the Performance of Provincial Power Assets,” author Steven Robins shows how provinces can shift the risk of mistaken demand forecasts and overinvestment from ratepayers to private investors, causing overall electricity prices for consumers to fall.

German energy policy and the way to sustainability: Five controversial issues in the debate on the “Energiewende”

German governments throughout the last 25 years have accepted the sustainability paradigm und put forth an energy policy that supports the development of renewable energies, the reduction of greenhouse gas emissions and the improvement of energy efficiency. Together with the process of seeking to phase out nuclear power, these objectives constitute the ‘Energiewende’ (energy transition) the Energiewende has reached a level that reveals its challenges and thus makes it a valuable case study. Based on a multi-method stakeholder analysis, frequently debated controversial issues related to the Energiewende have been identified and will be confronted with “reality” in this paper. The set of controversial issues includes the following five aspects: security of electricity supply, rising electricity prices for industry and commerce, rising electricity prices for consumers, impacts of the energy transition on employment, and the effects of the politically instigated speed of the Energiewende on its practical implementation.

The pass-through rates of carbon costs on to electricity prices within the Australian National Electricity Market

This paper statistically investigates the interaction between a carbon price signal and wholesale electricity spot prices within the Australian National Electricity Market (NEM). While prior studies in Australia have been mainly conducted based on the theoretical and simulation methods, this paper examines the issue by employing an empirical analysis using daily data from July 2010 to October 2013. The findings reveal that carbon costs would indeed be fully passed on to wholesale electricity spot prices resulting in higher electricity prices for consumers and potential windfall profits for some generators.

Comparing different support schemes for renewable electricity in the scope of an energy systems analysis

The present analysis illustrates how energy system models can play an important role in the long-term evaluation of support schemes for renewable electricity. Methodological approaches for the explicit representation of such instruments are presented both for price-based and quantity-based systems. In the subsequent scenario comparison, the current German feed-in tariffs (FIT) are contrasted with several alternative support mechanisms. With the current scheme, renewable generation is increased to almost 46% of gross electricity consumption in 2020 and 54% in 2030 associated with a rise in the surcharge on consumer electricity prices of 40% between 2011 and 2020. By switching to a technology–neutral certificate system which promotes only the most cost-efficient generation and adheres to the political targets renewable generation costs could be lowered by more than €200 billion between 2013 and 2030. At the same time, it has to be kept in mind that technology–neutral systems tend to cause a higher cost burden for electricity consumers. The greatest cost reduction can be achieved under a technology-specific quantity-based system with a decrease in cumulated FIT differential costs of €68 billion and of €416 billion in total energy system costs between 2013 and 2030 compared to the current system.

Do producers apply a capacity cutting strategy to increase prices? The case of the England and Wales electricity market

Promoting competition among electricity producers is primarily targeted at ensuring fair electricity prices for consumers. Producers could, however, withhold part of production facilities (i.e., apply a capacity cutting strategy) and thereby push more expensive production facilities to satisfy demand for electricity. This behavior could lead to a higher price determined through a uniform price auction. Using the case of the England and Wales wholesale electricity market we empirically analyze whether producers indeed did apply a capacity cutting strategy. For this purpose we examine the bidding behavior of producers during high- and low-demand trading periods within a trading day. We find statistical evidence for the presence of capacity cutting by several producers, which is consistent with the regulatory authority's reports.

Can Producers Apply a Capacity Cutting Strategy to Increase Prices? The Case of the England and Wales Electricity Market

Promoting competition among electricity producers is primarily targeted at ensuring low electricity prices for consumers. Producers could, however, withhold part of production facilities (i.e., apply a capacity cutting strategy) and thereby push more expensive production facilities to satisfy demand for electricity. This behavior could eventually lead to a higher price determined through a uniform price auction. In this paper, using the case of the England and Wales wholesale electricity market, we empirically examine whether producers can indeed apply a capacity cutting strategy. We analyze the bidding behavior of producers during high- and low-demand trading periods across trading days and find direct and indirect evidence for producers' successful manipulation of capacity bids targeted at increasing a wholesale electricity price. We also examine whether the regulatory reforms to improve competition were successful at mitigating the extent of strategic capacity manipulation.