Electricity sector restructuring in India: an environmentally beneficial policy?

It has been suggested that reforms to the electricity sector in developing countries encouraging the entry of independent power producers (IPPs) are likely to result in environmental improvements similar to those recently made in a number of developed economies. The present paper evaluates this claim by examining the experience of the Indian power sector. It finds that recent investments by IPPs have reduced the pollution-intensity of electricity generation in the country. Yet they have not brought the significant gains seen in countries such as the UK, nor are they likely to in the foreseeable future. This is largely a product of the nature and context of electricity sector reform in India which is less favourable to environmentally beneficial outcomes. Accordingly, the paper concludes by suggesting that the environmental benefits of restructuring are not automatic, but depend on the existence of an enabling structural, institutional and regulatory framework.     

The case for a new energy research,development and promotion policy for the UK

This paper is a critical assessment of the current balance of efforts towards energy research and development (R&D) and the promotion of low-carbon electricity technologies in the UK. We review the UK's main technological options and their estimated cost ranges in the medium term. We contrast the energy R&D spending with the current and expected future cost of renewable promotion policies and point out the high cost of carbon saving through existing renewable promotion arrangements. We also note that liberalisation of the electricity sector has had significant implications for the landscape of energy R&D in the UK. We argue that there is a need for reappraisal of the soundness and balance of the energy R&D and renewable capacity deployment efforts towards new energy technologies. We suggest that the cost-effectiveness of UK deployment policies needs to be more closely analysed as associated costs are non-trivial and expected to rise. We also make a case for considering increasing the current low level of energy R&D expenditure. Much of energy R&D is a public good and we should consider whether the current organisation of R&D effort is fit for purpose. We argue that it is important to build and maintain the research capability in the UK in order to absorb spillovers of technological progress elsewhere in the world. Against this background, the recent signs that an energy R&D renaissance could be underway are therefore positive and welcome.     

Incentive regulation of electricity distribution networks: Lessons of experience from Britain

This paper reviews the recent experience of the UK electricity distribution sector under incentive regulation. The UK has a significant and transparent history in implementing incentive regulation in the period since 1990. We demonstrate the successes of this period in reducing costs, prices, and energy losses while maintaining quality of service. We also draw out the lessons for other countries in implementing distribution sector reform. We conclude by discussing the place of incentive regulation of networks within the wider reform context, the required legislative framework, the need for appropriate unbundling, the importance of quality of service incentives, the regulatory information requirements, and the role of sector rationalisation.     

Business model innovation in electricity supply markets: The role of complex value in the United Kingdom

This research investigates the new opportunities that business model innovations are creating in electricity supply markets at the sub-national scale. These local supply business models can offer significant benefits to the electricity system, but also generate economic, social, and environmental values that are not well accounted for in current policy or regulation. This paper uses the UK electricity supply market to investigate new business models which rely on more complex value propositions than the incumbent utility model. Nine archetypal local supply business models are identified and their value propositions, value capture methods, and barriers to market entry are analysed. This analysis defines 'complex value' as a key concept in understanding business model innovation in the energy sector. The process of complex value identification poses a challenge to energy researchers, commercial firms and policymakers in liberalised markets; to investigate the opportunities for system efficiency and diverse outcomes that new supplier business models can offer to the electricity system.     

电力市场化改革中的终端电力能源效率问题

提高终端电力能源效率,是实现电力可持续发展的重要保障。然而,从我国电力市场化改革的进程来看,终端电力能源效率问题在很大程度上被忽视,甚至还受到了一定的负面影响。如何将终端电力能源效率问题综合纳入电力改革进程,采取妥善的应对措施促进终端电力能源效率的持续提高,是我国电力改革所面临的一项重大挑战。本文试图分析英、美两国电力市场化改革中针对终端电力能源效率问题所采取的政策措施,并探讨其对我国的启示意义。     

Industrial and institutional restructuring of the Russian electricity sector: Status and issues

The reform of the Russian electricity industry represents one of the largest and most technically complex post-Soviet era industrial restructurings. This paper presents the framework, status, and perspectives for the Russian electricity sector liberalisation. Uncertainties regarding the effective implementation of the reform are specifically examined. Ultimately the critical analysis of the reform questions the feasibility and adequacy of the recommended measures in the specific Russian context. Current theories fail to answer a fundamental issue, namely how to promote investment in an obsolete electrical infrastructure and, more generally, whether a pure free market model is compatible with physical constraints posed by the electricity sector. A careless deregulation of the Russian electricity system could hinder the country's stable and sustainable development, as its economy and the population's service have traditionally been closely linked to the electricity industry.     

英国电力改革20年引发的思考

1990年4月开始的英国电力体制改革是按照新自由主义理论来设计的,其主要内容是:所有权从国家向私人投资者转变;雇员向继承企业的转移;引入竞争性市场;形成独立管制系统。世界银行1992年政策报告介绍了美、英等国的电力体制改革经验之后,对发展中国家的电力改革提出了5项原则规定,这些规定实际上要求发展中国家按照美、英等国的电力体制改革模式进行改革。对于中国电力体制改革是否应采用英美的单一购买机制模式存在着争议。美国加州2000年采用单一购买机制模式进行的电力改革酿成了电力危机。英国经调查研究,决定从2001年3月起用新电力交易制度替代强制电力库,形成了英国电力体制改革的第二波。这使人们认识到,在英国已被认为不可行的单一购买机制不能继续照抄照搬。最近20年,世界能源发生了变化。英国原来发起的竞争性电力体制改革只能适应以化石能源发电为主的市场,为了应对气候变化,要实行节能减排,发展低碳能源发电,为此英国正在酝酿第三波新的电力体制改革。回顾英国20年的电力体制改革,我们应思考:为什么英国在20年里不断地调查研究,不断地创新电力体制改革模式?而我们在这20年里只是跟着英国亦步亦趋,不能创新电力体制改革模式呢?     

Made in Mexico: Energy reform and manufacturing growth

We assess the real effects of a recent opening of the energy sector in Mexico to private investment. We look at one particular channel, which operates through the change in the structure of electricity generation in favor of cheaper sources of energy, such as natural gas. We look at the potential impact of this structural change on electricity prices and ultimately on manufacturing output using subsector and state-level manufacturing output data. We first document that electricity prices—relative to oil and gas—are more important to the manufacturing sector, with a one-standard deviation reduction in those prices leading to a 2.8% increase in manufacturing output. This elasticity, together with estimated decreases in electricity prices on the back of the reform, could increase manufacturing output by up to 3.6%, and overall real GDP by 0.6%. Larger effects are possible in the long run if increased efficiency in the electricity sector leads to further decreases in electricity prices. There can also be larger effects stemming from output in the services sector which we find to also respond statistically significantly to electricity prices; and from the endogenous response of unit labor costs, which decrease with lower electricity prices.     

Towards improved policy processes for promoting innovation in renewable electricity technologies in the UK

This paper analyses recent, current and potential future relations between policy processes and substantive outcomes in UK low carbon innovation policy, focussing on policies relating to renewable electricity generation technologies. It examines the development of policy processes relating to the adoption and implementation of the Renewables Obligation and how these may affect the current and likely future success of the Obligation in promoting low carbon innovation. It examines the new policy and institutional processes put in place in the 2003 Energy White Paper and argues that these are unlikely to provide the strategic long-term framework needed to realise the ambitious goals for UK energy policy set out in the White Paper. Finally, it outlines some suggestions for further development of policy processes to facilitate improved delivery of these goals, based on guiding principles for sustainable innovation policy processes, developed by the authors and their colleagues.     

Load research as a tool in electric power system planning,operation, and control—The case of Jordan

Electric load research involves the systematic collection and analysis of customers’ electrical energy as well as demand requirements by time-of-day, month, season, and year; consumption patterns; socio-economic and demographic influencing factors; and willingness-to-pay for electricity. The information created by load research are the bases for all studies and analyses conducted by the electricity company to plan, monitor, operate, and control the power system. Several attempts were carried out in Jordan to create this very important body of knowledge. Studies and analyses are conducted regularly to update the information. This paper presents the author's experience in conducting load research investigations. These efforts culminated in three distinct contributions, which are still very useful in planning and operation of the power system in Jordan. (1) The first contribution by the author is related to creating a huge database of energy and electricity consumption characteristics, trends, and driving forces. The database is being continuously updated and as such constitutes a very basic tool for all demand forecasting and other planning studies. (2) The second contribution involves the estimation of the cost of un-served (unmet) electrical energy due to outages. This estimate, which is still being used as reference for planning studies carried out in Jordan, was first coined by the author at 1.0US$/kWh. (3) The final contribution concerns the use of the information in the load research database and the accumulated experience in determining peak load composition. This effort created the “near-exact” estimate of the characteristics and constitutions of the peak load divided among the various consuming sectors as well as among the various end-uses in Jordan. The results of these contributions are still being used by the electricity sector in Jordan until this day, either as unique information or as a guideline or reference to more recent estimates. More importantly, the efforts, as outlined in the three contributions above, have established a good base and reference point for further ongoing activities to collect, analyze, and use the information by various entities in the electricity sector in Jordan. However, the efforts need to be properly coordinated and entrusted with a single entity to ensure a better quality of information and avoid conflicting decisions.     

Energy policy and European utilities’ strategy: Lessons from the liberalisation and privatisation of the energy sector in Romania

In the context of energy sector reforms pursued by Romanian government since 1990s, we compare and contrast the market outcomes of European utilities’ investment with the host government policy objectives. We begin with energy market reform in Romania and review governments’ efforts to attract foreign direct investment (FDI) and to gradually withdraw from the distribution and supply segments of electricity market. Subsequently, we illustrate the scope European utilities have had, market policy and design notwithstanding, for consolidating market power through regional dominance. We examine the extent to which these utilities have sought to enhance their positions through horizontal and vertical integration, counter to the EU plans for a competitive market structure. We find that the investments of European incumbents have not been resoundingly successful: although market entrance may have been justified on long-term strategic grounds, in the immediate term, segments acquired through competitive auctions have yielded modest regulated returns. Finally, we discuss the extent to which policy makers have achieved their goals. Although the short-term benefits of a competitive market structure have reached some consumers, a renewed interest in promoting ‘national champions’ reflect frustration with market mechanisms as a means of ensuring long-term strategic investments in the sector.     

Prospects for and barriers to domestic micro-generation: A United Kingdom perspective

Approximately 38% of current UK greenhouse gas emissions can be attributed to the energy supply sector. Losses in the current electricity supply system amount to around 65% of the primary energy input, mainly due to heat wasted during centralised production. Micro-generation and other decentralised technologies have the potential to dramatically reduce these losses because, when fossil fuels are used, the heat generated by localised electricity production can be captured and utilised for space and water heating. Heat and electricity can also be produced locally by renewable sources. Prospects and barriers to domestic micro-generation in the UK are outlined, with reference to the process of technological innovation, energy policy options, and the current status of the micro-generation industry. Requirements for the main technology options, typical energy outputs, costs to consumers, and numbers of installed systems are given where data is available. It is concluded that while micro-generation has the potential to contribute favourably to energy supply, there remain substantial barriers to a significant rise in the use of micro-generation in the UK.     

Efficiency-improving fossil fuel technologies for electricity generation: Data selection and trends

This paper studies patenting dynamics in efficiency improving electricity generation technologies as an important indicator of innovation activity. We build a novel database of worldwide patent applications in efficiency-improving fossil fuel technologies for electricity generation and then analyse patenting trends over time and across countries. We find that patenting has mostly been stable over time, with a recent decreasing trend. OECD countries represent the top innovators and the top markets for technology. Some non-OECD countries, and particularly China, are also very active in terms of patenting activity in this sector. The majority of patents are first filed in OECD countries and only then in BRIC and other non-OECD countries. BRIC and other non-OECD countries apply for patents that are mostly marketed domestically, but BRIC countries represent important markets for patent duplication of OECD inventions. These results are indicative of significant technology transfer in the field of efficiency-improving technologies for electricity production.     

Electricity sector integration in West Africa

Regional and global integration initiatives push for more electricity sector integration everywhere in the world, including West Africa. The creation of the West African Power Pool (WAPP) in 2000 and important investments under this new structure in 2006 are concrete actions that will result in a more integrated West African electricity sector. But will this integrated sector be more functional than the previous ones? Will the identified electricity sector problems be solved with the new power pool? This paper analyzes how power sector integration is presented by international institutions (the UN Economic Commission for Africa, World Energy Council and World Bank) and identifies three problematic issues with the current integration approach: lack of African ownership, unclear and conflicting reform objectives and uncertainty of integration outcomes.     

A comparative multi-disciplinary policy review in wind energy developments in Europe

Over recent decades, European Union countries have committed to increasing their electricity production from renewable energy sources (RESs). Wind energy plays a significant role in a sustainable future. This paper presents a political, economic, social, technological, legal and environmental analysis. Although these countries have made many improvements in their legal frameworks aiming to attract investors and boost the RE sector, there are still challenges. The UK focuses on offshore wind energy, adjusts the economic strategy and changes the legislation context. Germany has the healthiest economic conditions, as it keeps following its initiative to design a new programme for an energy transition from conventional to RESs with emphasis on the onshore. Greece has only a few installations and much room for development but needs to make further changes in the legislation and economy so as to attract more investors in the long term. The purpose of this research is to analyse, highlight and discuss vital aspects of these countries as well as the European environment, with reference to their current wind energy activities. Ultimately, it attempts to give a wider perspective and to serve as a guide for future studies on the wind energy sector.     

The offshore trend: Structural changes in the wind power sector

In recent years, the wind power sector has begun to move offshore, i.e. to use space and good wind speeds on the open sea for large scale electricity generation. Offshore wind power, however, is not just technologically challenging but also a capital intensive and risky business that requires particular financial and organizational resources not all potential investors might have. We therefore address the question, what impact offshore wind power may have on ownership and organizational structures in the wind power sector. We compare on- and offshore wind park ownership in Denmark, the UK and Germany. The analysis shows that offshore wind power in all three countries is dominated by large firms, many of which are from the electricity sector. In Denmark and the UK, also investors from the gas and oil industry play an important role in the offshore wind business. This development represents a major shift for countries such as Germany and Denmark, in which the wind power sector has grown and matured on the basis of investments by individuals, farmers, cooperatives and independent project developers. The structural changes by which offshore wind power is accompanied have consequences for turbine manufacturers, project developers, investors, associations and policy makers in the field.     

History of electricity network control and distributed generation in the UK and Western Denmark

Achieving the ambitious targets for renewable electricity generation in Europe will require harnessing a diverse range of energy sources, many of which are decentralised, small scale, and will be connected directly to the distribution networks. To control the two-way flows of electricity, the current passive network configurations will need to be replaced by active network management. This will require, in particular, innovations in intelligent IT-based network control. This paper draws on research on Large Technical Systems (LTS) and control systems in other sectors to analyse the evolution of electricity network control in western Denmark and the UK, since the Second World War. It concludes that lack of progress in network control has only recently—largely because of the combined needs to provide greater reliability and ‘green’ electricity within liberalised markets—emerged as a ‘reverse salient’ that will prevent the further development of the LTS of electricity supply industry towards desired direction. Breaking the inertia in the LTS and its control systems will require determined government action to promote learning and collaborative search for solutions. The UK might well draw lessons from the Danish pragmatism in fostering innovation through targeted support to collaborative R&D efforts towards sustainability objectives.     

Assessing the lifecycle greenhouse gas emissions from solar PV and wind energy: A critical meta-survey

This paper critically screens 153 lifecycle studies covering a broad range of wind and solar photovoltaic (PV) electricity generation technologies to identify 41 of the most relevant, recent, rigorous, original, and complete assessments so that the dynamics of their greenhouse gas (GHG) emissions profiles can be determined. When viewed in a holistic manner, including initial materials extraction, manufacturing, use and disposal/decommissioning, these 41 studies show that both wind and solar systems are directly tied to and responsible for GHG emissions. They are thus not actually emissions free technologies. Moreover, by spotlighting the lifecycle stages and physical characteristics of these technologies that are most responsible for emissions, improvements can be made to lower their carbon footprint. As such, through in-depth examination of the results of these studies and the variations therein, this article uncovers best practices in wind and solar design and deployment that can better inform climate change mitigation efforts in the electricity sector.     

Electricity restructuring in Turkey

Turkey implemented the electricity sector reform by which the Electricity Market Law no. 4628 passed in February 2001. Recently, all segments of the Turkish electricity sector are dominated by a vertically integrated, public-owned monopoly—Türkiye Elektrik Kurumu—the Turkish electricity institution. The Turkish electricity reform involves vertical deintegration of generation, transmission and distribution, introduction of competition into generation and retail sale, establishment of an independent regulatory authority and privatization of public generation and distribution entities. This article provides an overview of the Turkish electricity sector reform and defines some problems that may affect the reform success.