Efficiency and deregulation of the electricity market in Singapore

This study examines production efficiency of electricity generation in the New Electricity Market of Singapore (NEMS), where deregulation is currently proceeding. Singapore is reliant on foreign direct investments and exports so competition from countries with lower costs such as China and India is exerting pressure on the government to reduce the costs of doing business here. Electricity cost is one of these. Deregulation is believed to be able to bring about lower electricity costs due to the various efficiency gains possible. This study concerns itself mainly with production efficiency and attempts to calculate possible production efficiency gains by using linear programming model. Production-efficiency gains are quantified by the base case scenario of continued regulation versus four counterfactual deregulation scenarios. The results indicate that cost gains could be about eight per cent of current production cost, and this is possibly a lower-bound estimate. However, whether the purported efficiency gains are realized is to be seen as the deregulation proceeds.     

Forecasting the joint distribution of Australian electricity prices using dynamic vine copulae

We consider the problem of modelling and forecasting the distribution of a vector of prices from interconnected electricity markets using a flexible class of drawable vine copula models, where we allow the dependence parameters of the constituting bivariate copulae to be time-varying. We undertake in-sample and out-of-sample tests using daily electricity prices, and evidence that our model provides accurate forecasts of the underlying distribution and outperforms a set of competing models in their abilities to forecast one-day-ahead conditional quantiles of a portfolio of electricity prices. Our study is conducted in the Australian National Electricity Market (NEM), which is the most efficient power auction in the world. Electricity prices exhibit highly stylised features such as extreme price spikes, price dependency between regional markets, correlation asymmetry and non-linear dependency. The developed approach can be used as a risk management tool in the electricity retail industry, which plays an integral role in the apparatus of modern energy markets. Electricity retailers are responsible for the efficient distribution of electricity, while being exposed to market risk with extreme magnitudes.     

The decline of the world’s energy intensity

Energy intensity of the total primary energy supply (TPES), total final energy consumption (TFC) and LOSSES in the conversion from TPES to TFC were analyzed for the World, OECD and Rest of the World (ROW) countries. LOSSES increased significantly for all groups of countries due to the increase of electricity production from coal in the period studied (1971–2008). Electricity share final consumption almost doubled, increasing from 8.8% to 17.2% in the period studied. However the energy intensity of LOSSES remained practically constant, which reflects the fact that the efficiency of electricity generation from coal (the main source of electricity) remained practically constant in that period. Despite the attractiveness of end-use devices running on electricity such as computers, which is typical of modern societies, the CO₂ emissions are bound to increase unless coal is replaced by less carbon emitting sources such as natural gas, renewables and nuclear energy.     

Electricity theft: Overview,issues, prevention and a smart meter based approach to control theft

Non-technical loss (NTL) during transmission of electrical energy is a major problem in developing countries and it has been very difficult for the utility companies to detect and fight the people responsible for theft. Electricity theft forms a major chunk of NTL. These losses affect quality of supply, increase load on the generating station, and affect tariff imposed on genuine customers. This paper discusses the factors that influence the consumers to steal electricity. In view of these ill effects, various methods for detection and estimation of the theft are discussed. This paper proposes an architectural design of smart meter, external control station, harmonic generator, and filter circuit. Motivation of this work is to deject illegal consumers, and conserve and effectively utilize energy. As well, smart meters are designed to provide data of various parameters related to instantaneous power consumption. NTL in the distribution feeder is computed by external control station from the sending end information of the distribution feeder. If a considerable amount of NTL is detected, harmonic generator is operated at that feeder for introducing additional harmonic component for destroying appliances of the illegal consumers. For illustration, cost–benefit analysis for implementation of the proposed system in India is presented.     

Quantifying the effect of renewable generation on day–ahead electricity market prices: The Spanish case

The penetration of renewable generation has grown since the electricity sector has been deregulated. To account for that, this paper proposes a methodology to estimate the downward effect of renewable generation participation upon the day-ahead electricity market prices, since such an effect is quite intuitive observing the merit order of the generating units. The European Electricity Market Matching Algorithm (EMMA) is currently based on Euphemia (Price Coupling of Regions), though there are several differences among countries across Europe. The new algorithm proposed uses market orders, which include aggregate hourly orders such as aggregate supply and demand curves. These orders are simple orders and the marginal price is affected by complex orders, especially by the minimum income condition (MIC) used in the Iberian Electricity Market and considered in our proposed algorithm. A case study of the Spanish day-ahead electricity market is evaluated for 2015, for which a daily generation sample is composed of 16 days in 2015. The sample is created following the characteristics of thermal production, renewable production and inframarginal production. The conclusions are drawn comparing the simulations of the real marginal prices and the new marginal prices after incorporating renewable generation participation into the aggregate demand curve at the maximum price.     

关于中国电价问题的探讨

中国电力工业与发达国家电力工业的最大差别是电价,发展中国家和传统的社会主义国家都以大大低于成本的价格出售电力。发达的市场经济国家实行市场定价,电价较高,发展中国家是政府定价,定价较低。电价改革是电力体制改革的前提条件。与发达国家比较,我国生活电价严重偏低,我国工业电价低于OECD大多数国家,OECD大多数国家生活电价都高于工业电价,而我国生活电价还低于工业电价,所以我国生活电价严重偏低。为改变我国居民电价严重偏低的问题,我国自2008年开始研究实行阶梯电价。由于中国目前的电价严重偏低,中国电力工业因长期维持低电价而处于高负债和部分企业资不抵债的境地。国外电力投资商撤离中国,民营电力投资商撤离电力工业,五大电力集团煤电企业严重亏损,煤电新增装机容量不断减少。为此加快电价的市场化改革势在必行。     

Modeling and prediction of Turkey’s electricity consumption using Artificial Neural Networks

Artificial Neural Networks are proposed to model and predict electricity consumption of Turkey. Multi layer perceptron with backpropagation training algorithm is used as the neural network topology. Tangent-sigmoid and pure-linear transfer functions are selected in the hidden and output layer processing elements, respectively. These input–output network models are a result of relationships that exist among electricity consumption and several other socioeconomic variables. Electricity consumption is modeled as a function of economic indicators such as population, gross national product, imports and exports. It is also modeled using export–import ratio and time input only. Performance comparison among different models is made based on absolute and percentage mean square error. Electricity consumption of Turkey is predicted until 2027 using data from 1975 to 2006 along with other economic indicators. The results show that electricity consumption can be modeled using Artificial Neural Networks, and the models can be used to predict future electricity consumption.     

Electricity consumption and economic growth: A cross-country analysis

Electricity has been the foundation of economic growth, and constitutes one of the vital infra-structural inputs in socio-economic development. The world faces a surge in demand for electricity that is driven by such powerful forces as population growth, extensive urbanization, industrialization, and the rise in the standard of living. This paper attempts to ascertain whether there is a systematic relationship between electricity consumption and economic growth. To this end, we use a large set of data that spans 88 countries during the period, 1975–2004. A statistically significant inverted-U-shaped relationship between per-capita consumption of electricity and per-capita income is detected. Nevertheless, by using a purchasing power parity that is much higher than the per-capita income of all the countries in the world, the level of per-capita income is estimated at the peak point of per-capita electricity consumption to be $61,379 in 2000 constant international dollars. Moreover, we segment the sample into Organization for Economic Cooperation and Development (OECD) countries and non-OECD countries, and separately analyze the developed and developing countries. The separate estimation shows that even though the peak income is higher than the average per-capita income, a statistically significant inverted-U-shaped relationship is found in OECD and developed countries but not in non-OECD and developing countries.     

Power it up: Strengthening the electricity sector to improve efficiency and support economic activity

Poor performance of the electricity sector remains a drag to economic efficiency and a bottleneck to economic activity in many low-income countries. This paper proposes a number of models that account for different equilibria (some better, some worse) of the electricity sector. They show how policy choices (affecting insolvency prospects or related to rules for electricity dispatching or tariff setting), stochastic generation costs, and initial conditions, affect investment in generation and electricity supply. They also show how credible (non-credible) promises of stronger enforcement to reduce theft result in larger (smaller) electricity supply, lower (higher) government subsidies, and lower (higher) tariffs and distribution losses, which in turn affect economic activity. To illustrate these findings, the paper reviews the experience of Haiti, a country stuck in a bad equilibrium of insufficient supply, high prices, and electricity theft; and that of Nicaragua, which is gradually transitioning to a better equilibrium.     

Modeling and prediction of Turkey’s electricity consumption using Support Vector Regression

Support Vector Regression (SVR) methodology is used to model and predict Turkey’s electricity consumption. Among various SVR formalisms, ε-SVR method was used since the training pattern set was relatively small. Electricity consumption is modeled as a function of socio-economic indicators such as population, Gross National Product, imports and exports. In order to facilitate future predictions of electricity consumption, a separate SVR model was created for each of the input variables using their current and past values; and these models were combined to yield consumption prediction values. A grid search for the model parameters was performed to find the best ε-SVR model for each variable based on Root Mean Square Error. Electricity consumption of Turkey is predicted until 2026 using data from 1975 to 2006. The results show that electricity consumption can be modeled using Support Vector Regression and the models can be used to predict future electricity consumption.     

电力与燃气在使用中的合理比价分析

电力与燃气是现代化大都市的主要能源消费品种,电力和燃气的比价具有导向作用,直接影响能源消费结构和能源使用的合理性。本文对工业发达国家和上海市的电力与燃气的比价进行了详细的分析和比较,并提出从合理使用能源,提高一次能源利用率的观点出发,电力与燃气按当量值的比价应为：居民生活使用要大于１．７：１,商业使用要大于１．２：１,并小于３．６：１。     

Implications of the EU Emissions Trading System for the South-East Europe Regional Electricity Market

As part of its climate policy, the European Union (EU) aims to reduce greenhouse gas (GHG) emissions levels by 20% by the year 2020 compared to 1990 levels. Although the EU is projected to reach this goal, its achievement of objectives under its Emissions Trading System (ETS) may be delayed by carbon leakage, which is defined as a situation in which the reduction in emissions in the ETS region is partially offset by an increase in carbon emissions in the non-ETS regions. We study the interaction between emissions and hydropower availability in order to estimate the magnitude of carbon leakage in the South-East Europe Regional Electricity Market (SEE-REM) via a bottom-up partial equilibrium framework. We find that 6.3% to 40.5% of the emissions reduction achieved in the ETS part of SEE-REM could be leaked to the non-ETS part depending on the price of allowances. Somewhat surprisingly, greater hydropower availability may increase emissions in the ETS part of SEE-REM. However, carbon leakage might be limited by demand response to higher electricity prices in the non-ETS area of SEE-REM. Such carbon leakage can affect both the competitiveness of producers in ETS member countries on the periphery of the ETS and the achievement of EU targets for CO₂ emissions reduction. Meanwhile, higher non-ETS electricity prices imply that the current policy can have undesirable outcomes for consumers in non-ETS countries, while non-ETS producers would experience an increase in their profits due to higher power prices as well as exports. The presence of carbon leakage in SEE-REM suggests that current EU policy might become more effective when it is expanded to cover more countries in the future.     

Wood gasification integrated with fuel cells

Techno-economic assessments of systems which integrate biomass gasification with fuel cell modules (molten carbonate or phosphoric acid) for electricity generation are presented. The wood-fired Phosphoric Acid Fuel Cell was found to be suitable where high heat/electricity values were required, but had low electrical efficiency. Electrical efficiencies of 13–17% are typical for these systems, as are Break-even Electricity Selling Prices (BESPs) of 10–20 p/kWh and specific investments of around £3000–£7500/kWe. This technology is unlikely to be considered for further development as an electricity generation system.The wood-fired Molten Carbonate Fuel Cell was found to be quite efficient and suitable for small-scale electricity generation purposes. Electrical efficiencies of 25–28% are typical for these systems, as are Break-even Electricity Selling Prices of 6–12 p/kWh and specific investments of around £2000–£5000/kWe. This technology could be considered for further development in the future, if the lifetime and capital costs of molten carbonate fuel cells can be improved. The problems in assessing future capital costs makes the economic viability of such systems difficult to determine.     

Rural electrification in an imperfect world: A case study from Mozambique

Electricity is universally recognized as a necessary, although not sufficient, requirement for social and economic development. However, increasing access to electricity in developing countries has proven to be difficult and expensive, particularly in rural areas. In this article, we analyze the dynamics of the relationship between electricity and socio-economic development by means of a cost–benefit analysis of a typical rural electrification project in Mozambique, assessing the impact of electricity on households, education, agro-business, commerce, and the public sector. We show that rural electrification can be commercially viable and cause structural transformation in rural areas within a short period of time. Finally, illustrated by the actual policy practice in Mozambique, we argue that low institutional quality is a key barrier to promote increased access to electricity for the poor.     

Consumer preference not to choose: Methodological and policy implications

Residential consumers remain reluctant to choose new electricity suppliers. Even the most successful jurisdictions, four US states and other countries, have had to adopt extensive consumer education procedures that serve largely to confirm that choosing electricity suppliers is daunting. Electricity is not unique in this respect; numerous studies find that consumers are generally reluctant to switch brands, even when they are well-informed about product characteristics. If consumers prefer not to choose, opening regulated markets can reduce welfare, even for some consumers who do switch, as the incumbent can exploit this preference by raising price above the formerly regulated level. Policies to open markets might be successful even if limited to industrial and commercial customers, with residential prices based on those in nominally competitive wholesale markets.     

Impacts of residential electricity subsidy reform in China

China’s rapid economic growth causes a sharp increase in the demand for electricity. Electricity price in China is generally controlled at a low level by the government, leading to a substantial electricity subsidy. Electricity subsidy is the focus of energy price reform. It is also most closely linked with residential life and is a very sensitive issue to residents. This paper adopts the price-gap approach to estimate the scale of electricity subsidy and finds that in 2010, residential electricity subsidy in China amounted to 467.17 billion CNY (Chinese yuan), accounting for 1.17 % of GDP in that year. Subsequently, the paper estimates the impacts of residential electricity subsidy reform on the welfare of residents using the compensating variation (CV) measurement. The results show that if residential electricity price rises by 50, 100, 150, and 191 %, the CV should be 288.5, 394.2, 451.1, and 467.2 billion CNY, respectively. The residential electricity subsidy reform also has a moderating role in the rebound effect of electricity consumption. The direct rebound effect in China’s residential electricity consumption is 20 %. Electricity subsidy reform will raise terminal electricity price and restrain residential electricity consumption. Therefore, electricity subsidy reform should be an effective measure to mitigate the rebound effect.     

Electricity tariffs in Sweden

Electricity tariffs in Sweden are analysed on the basis of the theory of public utility pricing. The coordinated pricing system used among power producers in the Nordic countries is found to be an almost ideal application of this theory. The power industry is criticized for its current objective of maintaining stable electricity tariffs. A rough estimate related to low-voltage electricity tariffs indicates a considerable savings potential for the country of a switch from the present uniform pricing system to interval pricing based on seasonal and daytime/nighttime variations.     

The politics of power: Electricity reform in India

Ongoing theft, corruption, and an artificially decreased pricing structure have made it nearly impossible for the state utilities in India to improve power service. As a result, industrial consumers across India exit the state-run system and rely on their own on-site power generation in order to ensure a consistent and reliable source of electricity. The 2003 Electricity Act encourages further power production from these captive plants through its open access clause. By encouraging the growth of these captive power plants, politicians in India set up a dual-track economy, whereby state-run and market-run production exist side-by-side. This strategy allows politicians to encourage private sector involvement in the electricity market, without jeopardizing the support of key political constituencies at the state level.     

Energy security vs. climate change: Theoretical framework development and experience in selected EU electricity markets

Electricity generation in different countries is based on a variety of fuel mixes compromising solid fossil fuels, oil, natural gas, nuclear and renewable energy sources. While in the past, national energy agendas have directed the optimal utilisation of domestic resources as a means to achieve supply security, today's environmental debates are influencing the electricity fuel mix in new directions. In this paper we examine the electricity sectors of Germany, Greece, Poland and the UK in an attempt to identify the policy and technology choices implemented in each country. The country selection is deliberately made to facilitate an extended overview of national agendas, varying domestic energy resources and industrialisation levels but still within the common EU framework. The focus is placed on policies related to two objectives, climate change mitigation and improving electricity supply security. The theoretical framework developed provides the possibility to assess the electricity sector independence at a national level using a multi-parametric analysis of the fuel mix data. Through a comparative assessment of the knowledge gained in different countries the authors provide insights and suggestions that allow for an improved understanding of the trade-offs and synergies that various policy options may introduce.     

Optimal renewable power generation systems for Busan metropolitan city in South Korea

The metropolitan cities of developed countries comprise more than 50% of the global population and consume over 60% of the world's energy. Many governments plan to enhance their energy infrastructure and the electricity supply–demand reliability of their energy sources. Among them, South Korea's government has developed electricity generation facilities, most of which use renewable resources such as photovoltaic and wind energy. This study determines the optimal renewable electricity generation configuration for one of the largest metropolitan cities in South Korea, Busan metropolitan city. A simulation using 2013 Busan electricity demand data produces this optimal configuration, which includes photovoltaic panels, wind facilities, converters, and batteries with $0.399 of COE (Cost of Electricity) and 100% of renewable fractions. Both the study's practical limitations and implications are discussed.