Liberalization Of Electricity Research Articles

Stochastic Optimal Strategies and Management of Electric Vehicles and Microgrids

This study combines the Nash–Cournot competition model and the stochastic optimization model to examine the impact of electric vehicle (EV) quantity fluctuations on microgrid operations, aiming to optimize energy usage in a competitive electricity market. Integrating distributed energy resources and bidirectional charging, microgrids offer a novel approach for energy optimization, aiding in renewable energy generation, peak demand management, and emission reduction. Empirical evidence highlights benefits in Taiwan’s electricity market and net-zero emissions target by 2050, with a case study demonstrating enhanced local renewable energy generation due to EVs and microgrid integration. As the number of EVs increases, electricity sales from microgrids decline, but electricity purchases remain stable. The degree of electricity liberalization also influences the supply and demand dynamics of the electricity market. Microgrids selling electricity only to the main grid increases total power consumption by 65.55 million MWh, reducing the market share of the state-owned utility (Taipower). Conversely, allowing retailers to purchase from microgrids increases total consumption by 30.87 million MWh with a slight market share decrease for Taipower. This study contributes to providing an adaptable and flexible general model for future studies to modify and expand based on different scenarios and variables to shape energy and environmental policies.

Liberalization of Electricity Sales Side for Electricity Market-Oriented Transaction Mode

The market-oriented reform of the energy sales side is currently having a considerable impact, and in the economically developed regions, the electricity sales industry has evolved a competitive trend. Power grid corporations now compete in the market rather than serving as the traditional dominant force in electricity sales. After a new round of electrical reform, a key concern for the growth of firms is how to better integrate into the reform and increase their core competitiveness. The dangers associated with power market-oriented trading are examined in this study, and three risk mitigation strategies are suggested: the creation of a big data power trading platform, an information management system, and a blacklist system. The findings demonstrate that the optimal trading approach can successfully reduce the risk of variation in electricity assessments and generate significant revenue from electricity usage for power users. Additionally, we develop a multi-objective combination optimisation profit model and advise positioning and defences for businesses following the introduction of the power selling side.

Analysis of the Financial Performance of Energy Companies in the Current Context in Romania

Abstract After a period of pandemic (COVID-19), the liberalisation of electricity markets (on 1 January 2021), the start of the war in Ukraine, the imbalances between energy supply and demand at European level, energy policies at EU (towards green energy) and national level, prices are rising massively and consumption is falling for both individuals and companies, with a direct impact on the financial performance of companies in this sector. The assessment of the financial performance of companies in the energy sector was based on a set of indicators calculated from both financial statement and market data. The analysis was carried out during 2019-30 September 2023 and targeted two producers S.N.G.N. Romgaz S.A., S.N. Nuclearelectrica SA, a carrier C.N.T.E.E. Transelectica SA and a distributor Societatea Energetică Electrică S.A.

Best Practices for Electricity Generators and Energy Storage Optimal Dispatch Problems

Abstract The growing share of renewable energy sources in the energy mix and the liberalization of electricity markets has drastically affected the operation of electricity generators. Especially, in the last decade, fossil fuel-based generators have shifted their role from providing continuous base load to covering the peak demand and providing backup capacity to stabilize the grid. At the same time, a large amount of storage capacity is foreseen to be integrated into electricity grids in the coming years to shave demand peaks, mitigate price volatility, and provide services to the grid. In such a situation, in order to properly manage these crucial technologies, and thus guarantee the economic viability of the operation, it is essential to properly optimize the dispatch and define the best scheduling. This paper considers a gas turbine combined cycle and battery energy storage to study the problem of dispatch optimization of both generators and storage technologies. Different optimization algorithms have been considered and mixed integer linear programming is selected for its ability to identify the global optimum and the reduced optimization time. The impact of optimization windows (i.e., the forecast horizon of electricity prices) is also investigated. It is highlighted that an increase in forecasting ability, at least up to 36 h, guarantees more effective scheduling; on the other hand, it may require a significantly longer time. Subsequently, different approaches to account for the operation and maintenance costs at the optimization stage are assessed, and, finally, a sensitivity analysis is carried out with respect to market parameters (price average and variability) and technology features (conversion efficiency, cycle cost, etc.).

Revisiting Market Power in the Polish Power System

The consequences of the liberalisation of electricity markets have been widely discussed in the literature emphasising the successes or failures of privatisation and deregulation. While most developed power systems have undergone a form of economic transformation, they still require to be monitored and analysed to assess market power. The Polish power system is an example wherein the potential of market power examined fifteen years ago was summarised as significant. Since then, the transformation process and changes in the ownership structure have taken place. This study focuses on the assessment of the potential of market power in the Polish electricity market. For this purpose, statistics on power companies were collected and processed. Then, structural and behavioural measures were applied, including concentration ratios, the entropy coefficient, the Gini coefficient, the Herfindahl–Hirschman Index (HHI), the Residual Supply Index (RSI), and the Lerner Index. The results reveal that, despite a dynamic increase in renewable capacity, market concentration has increased in recent years, achieving an HHI of 2020.9 in 2021. An increase in the Lerner Index of lignite and hard coal-fired units is also observed, indicating high mark-ups by the key market players. Based on quantitative analysis, policy recommendations are outlined to reduce the negative impact of market power on consumers.

Making Energy Markets: The Origins of Electricity Liberalisation in Europe by Ronan Bolton

Reviewed by: Making Energy Markets: The Origins of Electricity Liberalisation in Europe by Ronan Bolton Yves Bouvier (bio) Making Energy Markets: The Origins of Electricity Liberalisation in Europe By Ronan Bolton. Cham: Palgrave Macmillan, 2021. Pp. 367. As happens so often, the reader who hopes to find in this book a historical analysis of the title (Making Energy Markets) will be disappointed. Ronan Bolton's book, on the other hand, will provide much more enlightenment on the subtitle (The Origins of Electricity Liberalisation in Europe). The clarification is not insignificant, because the author does not deal with energy as a whole but only with electricity. Bolton presents a precise analysis of the movement initiated in the United Kingdom by the transformations of the Central Electricity Generating Board, which spread throughout Europe under the term "liberalization" during the 1990s. After a first part devoted to the United Kingdom, the author then describes liberalization in what he calls the "heart of Europe" (Germany, France, the European Commission) before focusing on the case of the Nordic countries, especially Norway, in the third part of the book. This structure may be surprising, but it is convincing in a dynamic systems approach in which technology, politics, and economics are intertwined. In the case of Norway, for instance, the Norwegian School of Economics in Bergen invented the structure-conduct-performance paradigm to justify the export of surplus hydroelectricity. According to the author, the European Commission's strategy was initially to generalize the British market model before integrating, at the beginning of the 1990s, a complexity linked to the diversity of energy sources in each member state. The interest of the book is not in the claimed socio-technical approach. Indeed, in placing himself in the tradition of Thomas P. Hughes, the author leaves not much space for technology and does not avoid the sacralization of the combined-cycle gas turbine. Similarly, he tends to make the technologies disappear behind the energy sources while reinforcing national stereotypes: gas for the United Kingdom, nuclear for France, coal for Germany, and hydroelectricity for Norway. Bolton thus leaves aside most of the concepts of "networks of power," including that of momentum, and does not go further into Richard Hirsh's theses as one might have hoped. For the technical aspects of electrical networks, he quotes the works of Vincent Lagendijk and Arne Kaijser but completely ignores the work on the history of computing, which is surprising for the period covered. Seeing in competition and the market an answer to the blockages of national systems is a repetition of the economic discourse and underestimates the permanence of competition in the electrical field. On this point, we can regret the gaps in the bibliography on the economic and political history of European construction: the complex nature of the notion of the market in Europe since the oil crisis (Warlouzet, Governing Europe in a Globalizing World, 2018) and the existence of a European view [End Page 597] of electricity for nearly one hundred years (Lagendijk, Electrifying Europe, 2008) before the liberalization of the 1990s arrived. The discussion forums of the International Energy Agency and the OECD (Schmelzer, The Hegemony of Growth, 2017) are simply ignored. Nevertheless, it is in the analysis of the inception of the electricity market through the debates on its regulation that Bolton's book effectively informs the history of technology. The pages devoted to the tensions of regulation perfectly translate the limits of the economic conception of markets on the one hand, and the only partial dependence on energy technologies on the other (chs. 4 and 7). In these intellectual, economic, and political margins, a regulated market is emerging in the United Kingdom. All the players, all the institutions, all the technical bodies have been involved at one time or another in this initiation of an electricity market. By combining long-term strategic analyses and micropolitical actions, the author highlights the unstable forms of electricity markets. The impossible quest for a long-term equilibrium in the electricity market is the main outcome of this book, for the United Kingdom in the late 1980s as for the European Union ten years later. Thus, the concluding chapter sets this period of...

Optimal Dispatch of Battery Energy Storage Considering Cycling and Calendar Ageing

The growing share of renewable energy sources in the energy mix and the liberalization of electricity markets drastically affected the operation of electricity generators. This transition from fossil fuel-based energy systems to renewable ones will significantly change the energy market, giving important opportunities for energy storage systems. In the next years, a large amount of storage capacity is foreseen to be integrated into the electricity grids to shave the demand peaks, mitigate price volatility, and provide services to the grid. In such a situation, to properly manage these crucial technologies, and thus guarantee the economic viability of the operation, it is essential to properly optimize the dispatch and define the best scheduling. This paper considers Battery Energy Storage (BES) to study the problem of dispatch optimization of storage technologies. The complete model of BES is developed, considering especially the effect of DoD (Deep of Discharge) on the total number of cycles, that influence significantly the degradation, and the influence of the current-rate on the total efficiency, due to the effects of losses for the Joule effect. The implemented optimization is based on a Mixed Integer Linear Programming (MILP) approach, the discretization of the state of charge (SoC), and the continuous update of rated capacity until the maximum admissible fade is reached. Different scenarios are compared showing how the effectiveness of the proposed approach at maximizing the net operational profits or minimizing the loss depending on the profitability of markets.

Assessing ASEAN’s Liberalized Electricity Markets: The Case of Singapore and the Philippines

The efforts towards the liberalization of electricity markets have sped up recently in some countries within the Association of Southeast Asian Nations (ASEAN) region. This step of opening up the electricity markets is aimed at establishing competitive and efficient electricity markets that not only reduce electricity prices, but also support a sustainable future by reducing carbon dioxide (CO2) emissions from electricity generation and promoting the wider adoption of renewable energy (RE)-based electricity generation. This paper assesses the effects of the electricity market liberalization process in Singapore and the Philippines on these expected outcomes during the period 2015–2020. The regression analysis results suggest that in the specified period, the liberalization of the electricity market in Singapore has delivered both household and industry electricity price reductions and improvement in the RE share. However, there is no significant effect of the electricity market liberalization process on the electricity generated CO2 emissions. For the same period, the results imply that with the electricity market liberalization process in the Philippines, the electricity prices for household consumers and electricity-generated CO2 emissions have increased. Additionally, the liberalization process has no significant impact on both the RE share and industry electricity prices in the Philippines. To overcome the obstacles and strike a balance between the expected outcomes, policy recommendations are given for ASEAN economies following the pathway of liberalized electricity markets.

Non-cooperative differential game and feedback Nash equilibrium analysis for real-time electricity markets

Continuous liberalization of electricity markets makes a strong correlation between the economic behaviors of market participants and their profits. To guide the production of generators before the market reaches equilibrium, a new framework is proposed to model the real-time electricity market with help of optimal control theory. The market price is described as the dynamic state using a sticky price model. We establish an N-person non-cooperative differential game model, where all participants try to maximize their profits independently only by observing power prices. The existence of feedback Nash equilibrium and uniqueness of optimal price trajectory are proved in detail, which will help other scholars build an effective differential game model. To protect the privacy of all generators, a distributed algorithm is proposed based on neurodynamic and consensus theory, which only requires information exchange among neighboring participants. Furthermore, a special case of a duopoly power market is investigated in detail and we provide a feedback time-continuous solution for each generator. Compared with the commercial Cplex solver, the proposed distributed algorithm performs better in convergence speed.

Is more competition better? Retail electricity prices and switching rates in the European Union

The European Union (EU) promotes the liberalization of retail electricity markets to achieve lower prices, diversified offers, greater customer participation, and sustainable consumption behaviours. While retail competition has been a reality in most EU member states, most studies find that retail competition is suitable for large customers, but the evidence on small customers is inconclusive. We analyze data on electricity prices and switching rates in 27 EU member states and the UK from 2000 to 2019. We find that retail competition is associated with lower prices and that the effect of full liberalization is greater than that of partial liberalization.

A new design for market power monitoring in the electricity market. A simulation for Italy

The liberalization of electricity markets has been dominated by conditions of oligopoly and market power, as shown in numerous studies in empirical literature on the supply side. However, regulators have used statistical measurements to monitor the extent of market power, making little reference to founded theoretical approaches. This paper provides a new contribution to the literature on the electricity market by presenting a theoretical and empirical model to construct competitive equilibrium, and estimating market power on both the supply and demand side of the day-ahead electricity market. We implement an accurate measurement of the welfare loss associated with non-competitive market conditions, based on ex-ante demand and supply behavior.This model provides a useful analytical tool for regulators and policy-makers in order to implement pro-competitive regulation. We perform an empirical simulation to show the effects of non-competitive equilibria on the Italian hourly markets over the period 2013–2014. In an ideal competitive market, prices would be lower than historical prices by about 2–5% and quantities would be higher by about 0.5–1%.

The Effect of Information Provision on Stated and Revealed Preferences: A Field Experiment on the Choice of Power Tariffs Before and After Japanese Retail Electricity Liberalization

This paper examines differences in attitudes towards electricity fee plans when information is provided on electricity bills based on past electricity consumption. We conducted randomized controlled trial stated preference (SP) and revealed preference (RP) experiments on the choice of electricity rates before and after liberalization. In the SP experiment, we measured participants' valuations of their electricity pricing plans. We found that providing information about the participants' benefit from switching diminished the tendency towards overconfidence. The valuation decreases substantially when information shows that a loss will be incurred from switching. The results of the RP and SP experiments differ. We found that the selection was not changed in the RP experiment even when providing information that a loss would be incurred.

The Advent of Electricity Liberalization in Cyprus. Critical Analysis of the Current State and Charting a Path to Liberalization

Cyprus is an island situated in the Easter Mediterranean and member of the European Union. Cyprus maintains an effective monopoly in electrifying the island chiefly by entrusting the electrification to the Cyprus Electricity Authority, a semi-governmental organization. The Electricity Authority aggregates all key functions for generating and ultimately matching the load. The electricity is mainly produced by burning petrol, mazut, at the power plants. Cyprus has recently passed Laws to enable liberalization of its electric industry. In the body of this research paper, we will unveil the current state of the electricity industry in Cyprus by expanding on the electricity state owned company, the regulatory Authority and the new Laws enabling the liberalization pathway. Then we focus on key ingredients in liberalizing electricity industry. The key focus of this article will be to appraise the Cyprus new Laws, outlining the positive conditions and stress the persisting barriers and provide recommendations.

Who pays the loyalty tax? The relationship between socioeconomic status and switching in Australia's retail electricity markets

The liberalisation of retail electricity markets aimed to benefit consumers through innovation and lower electricity prices. However, well-functioning retail markets require active consumers who are motivated to switch between offers for financial savings or better tailored products. Policymakers did not adequately consider the behavioural biases, market complexities and switching costs that have led to customer disengagement. This can have significant welfare implications, particularly if many of the disengaged customers are also vulnerable. In this article, we investigate the relationship between socioeconomic status and customer engagement using household survey data covering the three largest cities in Australia. We find that lower socioeconomic status is associated with lower engagement. Unemployment, lower educational attainment, and lower income are all associated with lower switching rates. Solving this issue is complex and requires a suite of solutions however it is critical that vulnerable, disengaged customers are brought along because the costs of disengagement are likely to increase with digitalisation and the renewable energy transition.

An experimental study of capacity remuneration mechanisms in the electricity industry

After electricity liberalization, the “energy-only market” design lacks effective incentives to invest in new capacity. Across the world, capacity remuneration mechanisms have been taking hold as an alternative to the energy-only market to ensure adequate power generation capacity. The way these designs are characterized reflects the insight from general economic theory on market power and strategic behavior. Indeed, Europe is heading toward a patchwork of different, uncoordinated national mechanisms. In practice, design choices are driven by national policies, needs and constraints. In addition, they are progressively converging toward a market-based mechanism with a forward period and market power mitigation. In this paper, we investigate their efficiency properties in terms of new investments, the reduction in unserved energy frequency and the energy prices of a generic capacity remuneration mechanism that is impervious to the so-called forward capacity market. The results from laboratory experiments confirm that this mechanism gives better incentives to invest in new capacity than the energy-only market alone and provides an empirical understanding of the investment decision process. The forward capacity market contributes to lower energy market prices in peak demand and extra-high peak demand periods and average energy costs if we consider the social cost of unserved energy.

Can electricity liberalisation foster the development of radical clean-energy technologies?

Can electricity liberalisation foster the development of radical clean-energy technologies?

OLIGOPOLY TRENDS IN ENERGY MARKETS: CAUSES, CRISIS OF COMPETITION, AND SECTORAL DEVELOPMENT STRATEGIES

Uncertainty in the markets associated with COVID-19 created the need for choosing the optimal model of energy markets. At the current stage of energy markets development, oligopoly tendencies tend to prevail. The article discusses the problem of choosing an effective energy market model, using the example of the electricity market. The competitive energy market of the European Union (finalized with the adoption of the Third Energy Package) was chosen as the basic model, with which the energy markets of the Russian Federation and Azerbaijan are compared. The basic indicators of the EU market were defined and compared with similar indicators for the Russian and Azerbaijani markets. The article explored the main tendencies as well as deadweight losses for Russian and Azerbaijani markets. Recommendations for improving the competitiveness of the markets are developed. The study showed that the level of market competitiveness was directly associated with the economic security of the energy market. The ways of increasing market liberalization in Russia and Azerbaijan were proposed. The proposed gradual liberalization of electricity markets involves the transition from a closed monopolistic to an open competitive electricity market, changing the institutional structure, the search for new and effective mechanisms of interaction between the buyer and seller of electricity. It also creates an opportunity to improve the quality of electricity supply, increase the investment attractiveness of the sector at large, and reduce the cost of electricity.Keywords: degree of competition; electrical power; energy markets; European Union; market model.JEL Classifications: D43, D47DOI: https://doi.org/10.32479/ijeep.11634

On the Remuneration to Electrical Utilities and Budgetary Allocation for Substation Maintenance Management

The liberalization of electricity markets has produced a great change in electrical utilities. One of these changes has affected the methodology for setting their remuneration. Depending on the country, these are different. Despite the wide range of remuneration methodologies for the electricity market of each country, they all feature one common element: the remuneration of operation and maintenance. One of the messages that this remuneration transmits is the need to extend the useful life of the facilities to allow sustainable development. This article focuses on the remuneration schemes of electrical utilities, the classification of substations for the definition of their maintenance programs, and the budget allocation for the execution of maintenance in these critical infrastructures. The particularity of these facilities, in which it is generally necessary to de-energize some of their parts for maintenance, has also been taken into account. To this end, a simple methodology currently used is presented based on the standardization of the bays of the substations and their classification into levels of importance. This classification into levels enables the facilities to be grouped according to similarities in their maintenance plans, although they differ from each other in terms of the periodicity of the application of maintenance procedures. This methodology guarantees a similar distribution of maintenance activities and financial needs over the years. In addition, the methodology allows one to know the importance of each substation (since the greater the equivalent weight, the greater the importance). Finally, the application of the proposed methodology in a real case is presented. It shows the simplicity, effectiveness, and lamination of the budgetary allocation of the proposed methodology, this being the main contribution of the formulation.

Probabilistic Analysis of Small Signal Stability of Power System with Penetration of Distributed Generation: A Review

The liberalization of electricity markets, continuous increase in power demand, shortage in conventional generating and transmission capacities and the environmental awareness of consumers contribute to the wide application of Distributed Generation (DG) into power systems. The presence of DG presents system operators with new challenges regarding DG availability, integration and impact on system security and stability. Therefore, analysis of renewable energy penetrated power system using probabilistic approaches is of utmost importance in other to ascertain the impact of intermittency of the renewable generation on the power network. This work firstly reviews the problem of instability of power systems with a considerable share of renewable generation and its significant demand for probabilistic analysis, then, provides a critical evaluation of the available probabilistic methods that have been used for the assessment of power system small signal stability. Overview of frequently used methods are presented stressing their advantages and disadvantages with the aim of highlighting their strength and weaknesses. This paper, then proposes a method known as Stochastic Collocation Method that promises to be an effective probabilistic tool for the analysis of renewable energy penetrated power system.

Short-Term Optimization of a Combined Cycle Power Plant Integrated With an Inlet Conditioning Unit

Abstract Under new scenarios with high shares of renewable electricity, combined cycle gas turbines (CCGTs) are required to improve their flexibility to help balance the power system. Simultaneously, liberalization of electricity markets and the complexity of its hourly price dynamics are affecting the CCGT profitability, leading the need for optimizing its operation. An inlet conditioning unit (ICU) offers the benefit of power augmentation and “minimum environmental load” (MEL) reduction by controlling the gas turbine (GT) inlet temperature using cold thermal energy storage (TES) and a heat pump (HP). Consequently, an evaluation of a CCGT integrated with this unit including a day-ahead optimized operation strategy was developed in this study. To establish the hourly dispatch of the power plant and the operation mode of the ICU, a mixed-integer linear programing (MILP) optimization was formulated, aiming to maximize the operational profit of the plant within a 24 h horizon. To assess the impact of the unit operating under this dispatch strategy, historical data have been used to perform annual simulations of a reference power plant located in Turin, Italy. Results indicate that the power plant's operational profit increases by achieving a wider operational range during peak and off-peak periods. For the specific case study, it is estimated that the net present value (NPV) of the CCGT integrated with the ICU is 0.5% higher than the CCGT without it. Results also show that the unit reduces the MEL by approximately 1.34% and can increase the net power output by 0.17% annually.