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.     

Energy security and renewable electricity trade—Will Desertec make Europe vulnerable to the “energy weapon”?

Solar power imports to Europe from the deserts of North Africa, as foreseen in the Desertec concept, is one possible way to help decarbonising the European power sector by 2050. However, this approach raises questions of threats to European energy security in such an import scenario, particularly in the light of increasing import dependency and Russia's use of the “energy weapon” in recent years. In this paper we investigate the threat of North African countries using the Desertec electricity exports as an “energy weapon”. We develop and use a new model to assess the interdependence – the bargaining power symmetry, operationalised as costs – of a disruption in a future renewable electricity trade between North Africa and Europe. If Europe maintains current capacity buffers, some demand-response capability and does not import much more than what is described in the Desertec scenario, it is susceptible to extortion and political pressure only if all five exporter countries unite in using the energy weapon. Europe is not vulnerable to extortion by an export cut from only one country, as the European capacity buffers are sufficient to restore the power supply: no single exporter country would have sustained bargaining power over Europe.     

Integration of renewable energy into the transport and electricity sectors through V2G

Large-scale sustainable energy systems will be necessary for substantial reduction of CO₂. However, large-scale implementation faces two major problems: (1) we must replace oil in the transportation sector, and (2) since today's inexpensive and abundant renewable energy resources have fluctuating output, to increase the fraction of electricity from them, we must learn to maintain a balance between demand and supply. Plug-in electric vehicles (EVs) could reduce or eliminate oil for the light vehicle fleet. Adding “vehicle-to-grid” (V2G) technology to EVs can provide storage, matching the time of generation to time of load. Two national energy systems are modelled, one for Denmark, including combined heat and power (CHP) and the other a similarly sized country without CHP (the latter being more typical of other industrialized countries). The model (EnergyPLAN) integrates energy for electricity, transport and heat, includes hourly fluctuations in human needs and the environment (wind resource and weather-driven need for heat). Four types of vehicle fleets are modelled, under levels of wind penetration varying from 0% to 100%. EVs were assumed to have high power (10 kW) connections, which provide important flexibility in time and duration of charging. We find that adding EVs and V2G to these national energy systems allows integration of much higher levels of wind electricity without excess electric production, and also greatly reduces national CO₂ emissions.     

Advanced mechanisms for the promotion of renewable energy—Models for the future evolution of the German Renewable Energy Act

The German Renewable Energy Act (EEG) has been very successful in promoting the deployment of renewable electricity technologies in Germany. The increasing share of EEG power in the generation portfolio, increasing amounts of fluctuating power generation, and the growing European integration of power markets governed by competition calls for a re-design of the EEG. In particular, a more efficient system integration and commercial integration of the EEG power is needed to, e.g. better matching feed-in to demand and avoiding stress on electricity grids. This article describes three different options to improve the EEG by providing appropriate incentives and more flexibility to the promotion mechanism and the quantitative compensation scheme without jeopardising the fast deployment of renewable energy technologies. In the “Retailer Model”, it becomes the responsibility of the end-use retailers to adapt the EEG power to the actual demand of their respective customers. The “Market Mediator Model” establishes an independent market mediator responsible to market the renewable electricity. This model is the primary choice when new market entrants are regarded as crucial for the better integration of renewable energy and enhanced competition. The “Optional Bonus Model” relies more on functioning markets since power plant operators can alternatively choose to market the generated electricity themselves with a premium on top of the market price instead of a fixed price.     

An incentive mechanism for electricity transmission expansion in Mexico

This study proposes an incentive regulatory framework for expanding electricity transmission in Mexico. A two-part pricing model is implemented within a combined merchant-regulatory structure. Three cases are considered. In the first, a monopolist with “postage stamp tariffs” serves the whole country using uniform prices. In the second case, one firm holds a regional monopoly in each of the five electricity areas. In the third, a monopolist operates in all areas of the national electricity system and discriminates in the prices it charges in each of the regions. This approach is described and then applied to the Mexican electricity transmission network. Using real data, the study compares all three cases in terms of profits, capacity increases, and network expansion. The results are found to depend on two effects: the “economies-of-scale effect”, in which the maximum level is reached with a single network; and the “discriminatory effect” that results when a firm can discriminate among types of consumers. The economies-of-scale effect produces greater capacity and network expansion, whereas the discriminatory effect increases profits.     

A nuclear-powered North Africa: Just a desert mirage or is there something on the horizon?

All of the North African countries have plans to develop nuclear power. If successful, nuclear energy could supply up to 9–15% of all electricity consumption in the region by 2030. How realistic are these plans and under what conditions can they be implemented? This paper seeks to answer this question by analyzing the motivations and capacities for deploying nuclear energy in the five North African countries by examining both regional and national factors. These factors are compared to similar characteristics of the countries with existing nuclear power programs using a series of quantitative indicators. While all five countries have strong motivations to develop nuclear power, which result from the high growth rates in demand for electricity and energy security concerns, their financial and institutional capacities to deploy nuclear energy vary and are generally lower than in those countries which already operate nuclear power plants. Most likely, North Africa will need to rely on external assistance to implement its nuclear energy plans. The article identifies three scenarios of nuclear power development from the interplay between internal and external factors, particularly the success of renewable energy projects and the ability to attract international investment in nuclear power.     

Planning India's long-term energy shipment infrastructures for electricity and coal

The Purdue Long-Term Electricity Trading and Capacity Expansion Planning Model simultaneously optimizes both transmission and generation capacity expansions. Most commercial electricity system planning software is limited to only transmission planning. An application of the model to India's national power grid, for 2008–2028, indicates substantial transmission expansion is the cost-effective means of meeting the needs of the nation's growing economy. An electricity demand growth rate of 4% over the 20-year planning horizon requires more than a 50% increase in the Government's forecasted transmission capacity expansion, and 8% demand growth requires more than a six-fold increase in the planned transmission capacity expansion. The model minimizes the long-term expansion costs (operational and capital) for the nation's five existing regional power grids and suggests the need for large increases in load-carrying capability between them. Changes in coal policy affect both the location of new thermal power plants and the optimal pattern inter-regional transmission expansions.     

Pros and cons of exposing renewables to electricity market risks—A comparison of the market integration approaches in Germany,Spain, and the UK

The article examines how renewable electricity (RES-E) producers are integrated into the electricity market under the support legislations and regulatory frameworks of Germany, Spain, and the UK. Focus is on wind power, which faces the highest market integration challenge of all RES-E. The analysis shows that the three countries follow contrasting approaches of exposing RES-E producers to the market risks of forward electricity markets, balancing markets and system planning requirements. Risk exposure is highest in the UK and lowest in Germany. From a policy maker's perspective, there is a trade-off between a “high risk” and a “low risk” approach. When RES-E face high market risks, a higher level of financial support is required to stimulate RES-E development than in a low risk environment, but the exposure to market risks may also give an incentive to make efficient use of the respective market, thus limiting the indirect costs to society. The special characteristics of wind energy, however, put natural limits to the response of wind power plants to market prices and locational price signals and will increasingly influence electricity markets and grid infrastructure. These interdependencies should be recognised in the design of RES-E policies and market regulations.     

Optimized Integration of Renewable Energy Technologies Into Jordan's Power Plant Portfolio

Jordan has experienced a significant increase of peak load and annual electricity demand within the last years due to economic development and population growth. The experienced growth rates are expected to continue during the next decades, making large investments in new power plant capacity necessary. Additionally, when gas supply from Egypt was interrupted several times and crude oil world market prices increased simultaneously, recent years have shown painfully that a power supply exclusively based on fossil fuel imports is subject to a very high risk and can have a strong negative impact on the national budget. Electricity-sector authorities are therefore looking for suitable solutions to keep up with the increasing electricity demand, to make Jordan more independent from fossil fuel imports, and to provide electricity at reasonable prices in the future. This paper presents a methodology for the optimized integration of renewable energy (RE) technologies into Jordan's existing power plant portfolio. The core of the methodology is the mixed integer linear optimization program REMix-CEM, developed at the German Aerospace Center (DLR), which optimizes capacity expansion and unit commitment of RE and conventional power generation technologies simultaneously. After describing Jordan's electricity sector and the available RE resources, the developed methodology and the results are presented. The paper shows that by the year 2022, Jordan could generate at least 47% of its electricity demand by a well-balanced mix of concentrating solar power, utility-scale photovoltaics, and onshore wind power. This scenario would maintain the security of electricity supply, absorb present growth rates of power generation costs, and make Jordan significantly more independent of fossil fuel imports.     

A realistic framework to a greener supply chain for electric vehicles

The quantity of electric vehicles in the transport sector has steadily risen over the last 10 years. Most developed countries and China have laid out ambitious plans for electric vehicles penetration. However, there are several challenges that must be addressed on the supply‐chain side of the problem for a successful transition toward an alternative and less environmentally harmful transport system. This study proposes a methodology for the optimal plan and decision making of primary energy sources, electricity generation, electricity distribution to vehicles' charging stations, carbon capture and sequestration, and electric vehicles' charging stations network to satisfy the electricity demand of the overall economy including electric vehicles at a regional/countrywide level under operation and green constraints. The optimization problem was modeled as a mixed integer program in general algebraic modeling system (GAMS). The formulation was employed to propose the upcoming electricity supply chain for electric vehicles in the most populous German state (North Rhine‐Westphalia) in 2025. The optimization show that fossil‐based power still controls the generation in 2025, while carbon capture and sequestration along with higher renewable penetration help meeting the state's greenhouse gases (GHG) emission target. The charging stations network expansion consists of 12 820 charging points mainly alternating current (AC) chargers (22‐kW capacity).     

Concentration in the European electricity industry: The internal market as solution?

This article offers an analysis of the present competitive and regulatory framework of the European electricity sector and the results achieved with the liberalisation process. Considering the reactions of incumbents to the liberalisation, the focus in this work is mainly on the problem of market concentration in the sector. The new trends toward the creation of “national champions” as well as recent mergers between gas suppliers and electricity producers raise serious concerns about abuses of market power and risk of future collusion. In particular, the strategic linkage of existing markets and the expansion into new ones are analyzed in the light of the multimarket contact theory. Considering investment in interconnection among Member States, the internal market issue is investigated as a solution to the “risks” coming from liberalisation.     

The promotion of regional integration of electricity markets: Lessons for developing countries

This paper focuses on how to promote regional cooperation in electricity. We begin by discussing the theory of international trade cooperation in electricity, with a view to discussing what preconditions might be important in facilitating wide area trading across national borders.We then develop lessons based on the comparison of four case studies. These include three regional developing country power pools – the Southern African Power pool (SAPP), West African Power pool (WAPP) and the Central American Power Market (MER). We contrast these with Northern Europe's Nord Pool. These cases highlight both the potential and difficulty of having cross-jurisdictional power pools.In the light of the theory and evidence we present, we draw key lessons in the areas of: preconditions for trading; necessary institutional arrangements; practicalities of timetabling; reasons to be hopeful about future prospects.     

Ready for nuclear energy?: An assessment of capacities and motivations for launching new national nuclear power programs

The International Atomic Energy Agency reports that as of July 2009 there were 52 countries interested in building their first nuclear power plant. This paper characterizes and evaluates these “Newcomer Countries” in terms of their capacity and motivations to develop nuclear power. It quantifies factors historically associated with the development of nuclear energy programs and then benchmarks the Newcomers against these data. Countries with established nuclear power programs, particularly where nuclear facilities are privately owned, are typically larger, wealthier and politically stable economies with high government effectiveness. Nuclear power was historically launched during periods of high electricity consumption growth. Other indicators for the potential of nuclear power include: the size of the national grid, the presence of international grid connections and security of fuel supply for electricity production. We identify 10 Newcomers which most closely resemble the Established Nuclear Power Countries and thus are most likely to deploy nuclear energy, 10 countries where the development of nuclear energy is uncertain due to high political instability, 14 countries with lower capacities where pursuing nuclear energy may require especially strong international cooperation and 18 countries where the development of nuclear power is less likely due to their significantly lower capacities and motivations.     

Electricity produced from renewable energy sources—What target are we aiming for?

In 2001, the European Commission (hereafter “EC”) formulated an ambitious target of 21% of total community electricity consumption to be generated with renewable energy sources by 2010. Moreover, national indicative targets per Member State were specified. In practice, the latter are implemented in all Member States as national production targets, achievable exclusively through an increase of the domestic production of electricity produced from renewable energy sources (hereafter “RES-E”). However, in this article it will be shown that this is not in line with the EC's intent. Looking at the legislative process resulting in the Directive on the promotion of RES-E, it is demonstrated that instead the EC aimed for European trade in renewable electricity through national consumption targets.     

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.     

Sustainable electricity generation for rural and peri-urban populations of sub-Saharan Africa: The “flexy-energy” concept

Access to energy is known as a key issue for poverty reduction. Electrification rate of sub-Saharan countries is one of the lowest among the developing countries. However, this part of the world has natural energy resources that could help raising its access to energy, then its economic development. An original “flexy-energy” concept of hybrid solar PV/diesel/biofuel power plant, without battery storage, is performed in this paper. This concept is developed in order to not only make access to energy possible for rural and peri-urban populations in Africa (by reducing the electricity generation cost) but also to make the electricity production sustainable in these areas. For landlocked countries like Burkina Faso, this concept could help them reducing their electricity bill (then their fuel consumption) and accelerate their rural and peri-urban electrification coverage.     

Optimal energy efficiency policies and regulatory demand-side management tests: How well do they match?

Under conventional models, subsidizing energy efficiency requires electricity to be priced below marginal cost. Its benefits increase when electricity prices increase to finance the subsidy. With high prices, subsidies are counterproductive unless consumers fail to make efficiency investments when private benefits exceed costs. If the gain from adopting efficiency is only reduced electricity spending, capping revenues from energy sales may induce a utility to substitute efficiency for generation when the former is less costly. This goes beyond standard “decoupling” of distribution revenues from sales, requiring complex energy price regulation. The models’ results are used to evaluate tests in the 2002 California Standard Practice Manual for assessing demand-side management programs. Its “Ratepayer Impact Measure” test best conforms to the condition that electricity price is too low. Its “Total Resource Cost” and “Societal Cost” tests resemble the condition for expanded decoupling. No test incorporates optimality conditions apart from consumer choice failure.     

Enlarging the EU's internal energy market: Why would third countries accept EU rule export?

Why would countries without a membership perspective seek integration into the EU's internal energy market? One major element of the EU's external energy policy is the export of EU energy norms and regulations to neighbourhood countries and beyond. A core legal instrument the EU uses in this context is the Energy Community Treaty (ECT). The ECT goes both geographically and regarding its depth significantly beyond neighbourhood or association policies, addressing potentially also countries in the ‘far neighbourhood’ and aiming at the creation of a Single Market for energy with these countries. While, however, EU candidate countries are obliged to adopt the “acquis” before accessing the EU and therefore comply to EU rules already before they enter the Club, I argue that countries with no or only a vague membership perspective – i.e. countries where the EU cannot apply the “conditionality” – approach (e.g., ENP countries)—aim at deeper integration with the EU because they are either eager to demonstrate their capability and potential to become part of the Club, they seek greater independence from a regional hegemon or they envisage significant economic gains as common norms, rules and standards are likely to increase economic exchange with the EU.     

Carbon intensity of electricity in ASEAN: Drivers,performance and outlook

The Association of Southeast Asian Nations (ASEAN), with its ten member countries, has a total population exceeding 600 million. Its energy-related CO₂ emissions have been growing and in 2013 amounted to 3.6% of total global emissions. About 40% of ASEAN's energy-related CO₂ emissions are currently attributable to electricity production. In view of this high share, we study the CO₂ emissions of ASEAN's electricity production sector with a focus on the aggregate emission intensity (ACI) given by the level of CO₂ emissions for each unit of electricity produced. Drivers of ACI are analysed for individual countries and spatial analysis is conducted by comparing factors contributing to differences between the ACIs of individual countries and that of the ASEAN average. Arising from these analyses and in light of the current developments, it is concluded that drastic actions need to be taken both at the national and regional levels in order to reduce growth in the region's electricity-related CO₂ emissions. Two key policy issues, namely overcoming national circumstances to improve electricity generation mix and improving power generation efficiency, are further discussed.     

Renewable energy sources in European energy supply and interactions with emission trading

This paper presents a model-based approach, which allows to determine the optimised structure and operation of the EU-15 electricity supply under different political and economic framework conditions, with a focus on the integration of renewable energy sources for electricity generation (RES-E) in the EU-15 countries. The approach is designed to take into account the characteristics of power production from both renewable and conventional sources, including the technological and economic characteristics of existing plants as well as those of future capacity expansion options. Beyond that, fuel supply structures are modelled, as well as the international markets for power and CO₂-certificates with their restrictions. Thus, a profound evaluation of the exploitation of mid-term renewable potentials and an assessment of the market penetration of the various renewable power generation technologies under the (normative) premise of a cost-optimised evolution of the power system becomes possible. Results show that a promotion of renewable energies reduces the scarcity of CO₂-emission allowances and thus lowers marginal costs of CO₂ reduction up to 30% in 2030. Despite the higher overall costs, a diversification of the energy resource base by RES-E use is observed, as primarily natural gas and nuclear fuels are replaced.