The renewable energy targets of the Maghreb countries: Impact on electricity supply and conventional power markets

Morocco, Algeria and Tunisia, the three countries of the North African Maghreb region, are showing increased efforts to integrate renewable electricity into their power markets. Like many other countries, they have pronounced renewable energy targets, defining future shares of “green” electricity in their national generation mixes. The individual national targets are relatively varied, reflecting the different availability of renewable resources in each country, but also the different political ambitions for renewable electricity in the Maghreb states. Open questions remain regarding the targets’ economic impact on the power markets. Our article addresses this issue by applying a linear electricity market optimization model to the North African countries. Assuming a competitive, regional electricity market in the Maghreb, the model minimizes dispatch and investment costs and simulates the impact of the renewable energy targets on the conventional generation system until 2025. Special emphasis is put on investment decisions and overall system costs.     

Competitive and secure renewable hydrogen markets: Three strategic scenarios for the European Union

The European Union (EU) considers renewable hydrogen a key priority for achieving climate neutrality and therefore needs to develop competitive and secure renewable hydrogen supplies. International trade could play a major role in meeting EU hydrogen needs and will require the creation of highly integrated markets between member states. This article analyzes three strategic scenarios in which the EU prioritizes energy independence, cost optimization, or energy security using an optimization model of international hydrogen trade based on production potentials and cost curves in EU countries and potential trade partners. The results show that, while the EU could become hydrogen independent, imports from neighboring countries could minimize overall costs despite higher transportation costs. However, imports from neighboring countries may reproduce past energy dependence patterns. Our results show that to limit reliance on a single supplier without increasing overall costs, the EU could leverage long-distance imports.     

Assessment of demand for natural gas from the electricity sector in India

Electricity sector is among the key users of natural gas. The sustained electricity deficit and environment policies have added to an already rising demand for gas. This paper tries to understand gas demand in future from electricity sector. This paper models the future demand for gas in India from the electricity sector under alternative scenarios for the period 2005–2025, using bottom-up ANSWER MARKAL model. The scenarios are differentiated by alternate economic growth projections and policies related to coal reforms, infrastructure choices and local environment. The results across scenarios show that gas competes with coal as a base-load option if price difference is below US $ 4 per MBtu. At higher price difference gas penetrates only the peak power market. Gas demand is lower in the high economic growth scenario, since electricity sector is more flexible in substitution of primary energy. Gas demand reduces also in cases when coal supply curve shifts rightwards such as under coal reforms and coal-by-wire scenarios. Local environmental (SO₂ emissions) control promotes end of pipe solutions flue gas de-sulfurisation (FGD) initially, though in the longer term mitigation happens by fuel substitution (coal by gas) and introduction of clean coal technologies integrated gasification combined cycle (IGCC).     

Statistical analysis of negative prices in European balancing markets

The presence of renewable power generation technologies increases the need for system flexibility due to their variable nature. The increasing share of variable renewables in European power systems create a downward adequacy problem, which deals with the ability of power systems to cope with periods of excess generation. The occurrence of negative prices on Central Western European electricity markets confirms the relevance of this issue, which is referred to as “incompressibility of power systems” and is assessed as a barrier for further renewable power integration. The objective of this article is to identify the main drivers of negative price periods in European balancing markets, by means of both an empirical and regression analysis. Results confirm a positive relation with the scheduled generation of renewables and inflexible base load, as well as a negative relation with the scheduled system load. Furthermore, the occurrence of negative prices is related to the positive and negative forecast error of renewable generation and demand, respectively. It is concluded that negative balancing market prices provide a market signal for investments in flexibility sources such as flexible generation, demand response, electricity storage, and interconnector capacity.     

Renewable energy for sustainable development in Africa: a review

Renewable energy usage in Africa has been reviewed using South Africa, Egypt, Nigeria and Mali as case studies. The various national energy policies of these countries were analysed and areas that require attention to achieve sustainability were highlighted. On the overall, the success of sustainable development in Africa lies in addressing the imminent energy crisis in the continent. Excessive usage of fuel wood is already creating considerable environmental problems especially in the Sahel. Africa has all the potentials to solve its energy problems if appropriate infrastructural support can be provided for harnessing the abundant renewable resources in the continent, and if skills are pooled together and experiences shared in addressing the key issues.     

Energy production trend in Iran and its effect on sustainable development

The purpose of this study is to review the energy production trend from different energy resources in recent decades and its effect on sustainable energy production as one of the basic axis of sustainable development in Iran.Ninety nine percent of energy production in Iran comes from oil & gas and only 1% from renewable energy resources. Since Iran has very rich fossil energy resources, little attention has been paid to explore alternative ways of energy production. Majority of country's income is from oil & gas which put extra pressure on its natural resources. Continuing with the existing trend may lead to a path away from the goals of sustainable development, set for the country. Therefore, the sustainability study should be of interest to decision-makers.     

Germany's nuclear power plant closures and the integration of electricity markets in Europe

This paper examines the potential implications of national policies that lead to a sudden increase of wind power in the electricity mix for interconnected European electricity markets. More specifically, it examines market integration before and after the closures of eight nuclear power plants that occurred within a period of a few months in Germany during 2011. The short- and- long run interrelationships of daily electricity spot prices, from November 2009 to October 2012, in: APX-ENDEX, BELPEX, EPEX-DE, EPEX-FR, NORDPOOL, OMEL and SWISSIX; and wind power in the German system are analysed. Two MGARCH (Multivariate Generalized Autoregressive Conditional Heteroscedasticity) models with dynamic correlations are used to assess spot market behaviour in the short run, and a fractional cointegration analysis is conducted to investigate changes in the long-run behaviour of electricity spot prices. Results show: positive time-varying correlations between spot prices in markets with substantial shared interconnector capacity; a negative association between wind power penetration in Germany and electricity spot prices in the German and neighbouring markets; and, for most markets, a decreasing speed in mean reversion.     

Hydropower for sustainable water and energy development

Turkey has a total gross hydropower potential of 433 GWh/year, but only 125 GWh/year of the total hydroelectric potential of Turkey can be economically used. By the commissioning of new hydropower plants, which are under construction, 36% of the economically usable potential of the country would be tapped. Turkey presently has considerable renewable energy sources. The most important renewable sources are hydropower, biomass, geothermal, solar and wind. Turkey's geographical location has several advantages for extensive use of most of these renewable energy sources. Over the last two decades, global electricity production has more than doubled and electricity demand is rising rapidly around the world as economic development spreads to emerging economies. Not only has electricity demand increased significantly, it is the fastest growing end-use of energy. Therefore, technical, economic and environmental benefits of hydroelectric power make it an important contributor to the future world energy mix, particularly in the developing countries.     

Well-functioning balancing markets: A prerequisite for wind power integration

This article focuses on the design of balancing markets in Europe taking into account an increasing wind power penetration. In several European countries, wind generation is so far not burdened with full balancing responsibility. However, the more wind power penetration, the less bearable for the system not to allocate balancing costs to the responsible parties. Given the variability and limited predictability of wind generation, full balancing exposure is however only feasible conditionally to well-functioning balancing markets. On that account, recommendations ensuring an optimal balancing market design are formulated and their impact on wind generation is assessed. Taking market-based or cost-reflective imbalance prices as the main objective, it is advised that: (1) the imbalance settlement should not contain penalties or power exchange prices, (2) capacity payments should be allocated to imbalanced BRPs via an additive component in the imbalance price and (3) a cap should be imposed on the amount of reserves. Efficient implementation of the proposed market design may require balancing markets being integrated across borders.     

The importance of comprehensiveness in renewable electricity and energy-efficiency policy

Based on extensive research interviews and supplemented with a review of the academic literature, this article assesses the best way to promote renewable energy and energy efficiency. It begins by briefly laying out why government intervention is needed, and then details the four most favored policy mechanisms identified by participants: eliminating subsidies for conventional and mature electricity technologies, pricing electricity accurately, passing a national feed-in tariff, and implementing a nationwide systems benefit fund to raise public awareness, protect lower income households, and administer demand side management programs. Drawing mostly from case studies in the United States, the article also discusses why these policy mechanisms must be implemented comprehensively, not individually, if the barriers to renewables and energy efficiency are to be overcome.     

Canada’s energy perspectives and policies for sustainable development

A regression analysis is performed to make projections for the Canadian energy production and consumption. These have been increasing and are projected to increase even further in the near future. The primary energy production and consumption are projected to increase by 52% and 34%, respectively, by 2025 over 2004 if business as usual. The amount of fossil energy resources is finite and the extraction, transportation and combustion of fossil fuels cause environmental pollution and climate change. On the other hand, energy plays an important role in the economic and social development of Canada. Canada can develop further from an energy balance point of view, but this alone cannot be sustainable, because of the negative consequences of the major energy use on the environment. Application of energy localization and diversification is a promising solution, but in order to reach that, better energy efficiency and more use of renewable energy are necessary. Instead of non-compulsory policies Canada’s policy approach should have more compulsory policies. Only then Canada can be made to develop further in a sustainable manner.     

Hydropower in Turkey for a clean and sustainable energy future

Over the last two decades, global electricity production has more than doubled and electricity demand is rising rapidly around the world as economic development spreads to emerging economies. Not only has electricity demand increased significantly, it is the fastest growing end-use of energy. Therefore, technical, economic and environmental benefits of hydroelectric power make it an important contributor to the future world energy mix, particularly in the developing countries. This paper deals with policies to meet increasing energy and electricity demand for sustainable energy development in Turkey. Turkey has a total gross hydropower potential of 433 GWh/year, but only 125 GWh/year of the total hydroelectric potential of Turkey can be economically used. By the commissioning of new hydropower plants, which are under construction, 36% of the economically usable potential of the country would be tapped. Turkey's total economically usable small hydropower potential is 3.75 GWh/year.     

The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany

The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.     

Energy for sustainable development: A case of developing countries

Today, there are 1.4 billion people around the world that lack access to electricity, some 85% of them in rural areas. Without additional dedicated policies, by 2030 the number of people drops, but only to 1.2 billion. Some 15% of the world's population still lack access, the majority of them living in Sub-Saharan Africa. The number of people relying on the traditional use of biomass is projected to rise from 2.7 billion today to 2.8 billion in 2030. Addressing these inequities depends upon international recognition that the projected situation is intolerable, a commitment to effect the necessary change, and setting targets and indicators to monitor progress. A new financial, institutional and technological framework is required, as is capacity building in order to dramatically scale up access to modern energy services at the local and regional levels. In this paper, we discussed the energy situation of the developing countries for sustainable development.     

Electricity market auction settings in a future Danish electricity system with a high penetration of renewable energy sources - A comparison of marginal pricing and pay-as-bid

The long-term goal for Danish energy policy is to be free of fossil fuels through the increasing use of renewable energy sources (RES) including fluctuating renewable electricity (FRE).The Danish electricity market is part of the Nordic power exchange, which uses a Marginal Price auction system (MPS) for the day-ahead auctions. The market price is thus equal to the bidding price of the most expensive auction winning unit. In the MPS, the FRE bid at prices of or close to zero resulting in reduced market prices during hours of FRE production. In turn, this reduces the FRE sources’ income from market sales. As more FRE is implemented, this effect will only become greater, thereby reducing the income for FRE producers.Other auction settings could potentially help to reduce this problem. One candidate is the pay-as-bid auction setting (PAB), where winning units are paid their own bidding price.This article investigates the two auction settings, to find whether a change of auction setting would provide a more suitable frame for large shares of FRE. This has been done with two energy system scenarios with different shares of FRE.From the analysis, it is found that MPS is generally better for the FRE sources. The result is, however, very sensitive to the base assumptions used for the calculations.     

Electric power grid interconnections in Northeast Asia: A quantitative analysis of opportunities and challenges

Power grid interconnection has gained attention in Northeast Asia (NEA) as a means to build an economically efficient power system and to effectively utilize renewable energy, such as wind and solar resources in the Gobi Desert and hydro resources in Eastern Russia.In order to quantify the potential economic and environmental benefits from connecting power grids and developing renewables in NEA, we build an NEA-wide multi-region power system model using linear programming techniques. Our analysis considers power system characteristics, such as the seasonal and daily electric load curves of the various NEA economies.Compared to a “no grid extension” scenario, increased access to renewables contributes significantly to emissions reductions and fuel cost savings. However, the results imply modest benefits in lowering total cost because of the large initial investments needed in developing the renewables and the transmission lines. These limited total cost savings are likely to pose an implementation challenge for NEA grid interconnections. Our results also suggest that grid interconnections become more economically attractive in higher fuel price or lower initial cost situations. The relevant planning organizations should carefully consider the initial cost and future fuel price trends when considering how to interconnect power girds in an economical manner.     

Financial impact of energy efficiency under a federal combined efficiency and renewable electricity standard: Case study of a Kansas “super-utility”

Historically, local, state and federal policies have separately promoted the generation of electricity from renewable technologies and the pursuit of energy efficiency to help mitigate the detrimental effects of global climate change and foster energy independence. Federal policymakers are currently considering and several states have enacted a combined efficiency and renewable electricity standard which proponents argue provides a comprehensive approach with greater flexibility and at lower cost. We examine the financial impacts on various stakeholders from alternative compliance strategies with a Combined Efficiency and Renewable Electricity Standard (CERES) using a case study approach for utilities in Kansas. Our results suggest that an investor-owned utility is likely to pursue the most lucrative compliance strategy for its shareholders—one that under-invests in energy efficiency resources. If a business model for energy efficiency inclusive of both a lost fixed cost recovery mechanism and a shareholder incentive mechanism is implemented, our analysis indicates that an investor-owned utility would be more willing to pursue energy efficiency as a lower-cost CERES compliance strategy. Absent implementing such a regulatory mechanism, separate energy efficiency and renewable portfolio standards would improve the likelihood of reducing reliance on fossil fuels at least-cost through the increased pursuit of energy efficiency.     

Cross-border integration in the European electricity market. Evidence from the pricing behavior of Norwegian and Swiss exporters

This paper examines the electricity market integration process in two European areas based on the pricing behavior of Norwegian and Swiss exporters. The aim is to gain evidence for the period after the adoption of the “Second Legislative Package” (2003). The pricing behavior of Norwegian exporters indicates that the wholesale markets for Denmark and Sweden are highly integrated. Moreover, results are fully compatible with the existence of a very competitive marketplace for electricity. This clearly contrasts with the evidence provided by Swiss exporters. In this last case, analysis revealed differences in pricing-to-market behavior between Italy, France and Germany, which indicates that exporters take advantage of international market segmentation and divergences between market structures. This outcome provides a reasonable explanation as to why price differences between countries cannot be fully attributed to transmission costs, as has been claimed in previous research. We also found cross-country convergence in levels of markups and in pricing-to-market behavior of the Swiss exporters for the first part of the period that was analyzed. The evidence is fully consistent with an initial impulse toward market integration originated by reforms implemented at the beginning of the last decade.