Results 1 - 10 of 38
Results 1 - 10 of 38. Search took: 0.014 seconds
|Sort by: date | relevance|
[en] Due to a shortage of data and increased international mergers, national energy regulators are looking to international benchmarking analyses for help in setting price controls within incentive regulation. We present an international benchmarking study of 63 regional electricity distribution utilities in six European countries that aims to illustrate the methodological and data issues encountered in the use of international benchmarking for utility regulation. The study examines the effect of the choice of benchmarking methods using DEA, COLS and SFA models. We discuss what problems of international benchmarking are highlighted by the study and how they can be overcome
[en] Benchmarking of electricity networks has a key role in sharing the benefits of efficiency improvements with consumers and ensuring regulated companies earn a fair return on their investments. This paper analyses and contrasts the theory and practice of international benchmarking of electricity transmission by regulators. We examine the literature relevant to electricity transmission benchmarking and discuss the results of a survey of 25 national electricity regulators. While new panel data techniques aimed at dealing with unobserved heterogeneity and the validity of the comparator group look intellectually promising, our survey suggests that they are in their infancy for regulatory purposes. In electricity transmission, relative to electricity distribution, choosing variables is particularly difficult, because of the large number of potential variables to choose from. Failure to apply benchmarking appropriately may negatively affect investors’ willingness to invest in the future. While few of our surveyed regulators acknowledge that regulatory risk is currently an issue in transmission benchmarking, many more concede it might be. In the meantime new regulatory approaches – such as those based on tendering, negotiated settlements, a wider range of outputs or longer term grid planning – are emerging and will necessarily involve a reduced role for benchmarking. -- Highlights: •We discuss how to benchmark electricity transmission. •We report survey results from 25 national energy regulators. •Electricity transmission benchmarking is more challenging than benchmarking distribution. •Many regulators concede benchmarking may raise capital costs. •Many regulators are considering new regulatory approaches
[en] This study explores and quantifies the benefits of connecting more distributed generation (DG) with and without the use of smart connections in Great Britain. We examine the impacts on different parties (Distribution Network Operators, wider society and generators). As illustration we use a specific case study. Alternative connection scenarios are proposed (with partial and full interruptible capacity quota under a mix of generation with different technology-specific curtailment levels) for integrating DG units in a constrained area of the East of England covered by the Flexible Plug and Play project. The smart (interruptible) connection option is the preferred option across all the scenarios (higher NPV/MW). The analysis of the distribution of benefits between the different parties suggests that generators capture most of the benefits while DNOs and wider society capture much less benefit. A smart connection incentive, which recreates the benefits to DNOs from an earlier losses incentive, is proposed. By contrast with other societally desirable metrics which are usually incentivised or penalised, there is currently no direct connection between more DG MWs connected and DNO incentive payments. Our proposed smart connection incentive, by charging DG for smarter connection may help to distribute more efficiently the benefits for connecting more DG. - Highlights: • Three different dimensions of going smarter to connect DG are discussed. • Benefits for connecting DG in a constrained area (FPP project) are estimated. • Different DG connection scenarios are evaluated. • Generators benefit the most and wider society the least. • A smart connection incentive may help to reallocate the benefits of DG more efficiently.
[en] This paper explores the trends in the deployment and integration of distributed generation in Germany, Denmark and Sweden. The study concentrates on the regulation of renewable energy generation with a focus on grid access and connection mechanisms. The high rate of distributed generation penetration is mainly based on the early support that these countries gave to the expansion of renewable energy generation – mainly wind and solar – within their respective national policies. Germany and Denmark are the ones with the most sophisticated support schemes, which have shown a dynamic design over time. In terms of connections, Germany has the most favorable connection regime which provides not only priority connection but also priority grid access for generation units that produce electricity from renewable energy sources. Sweden guarantees equal treatment among different technologies (i.e. a non-discrimination principle). High connection costs have been observed specially in Germany and Denmark. The costs of network upgrades are usually socialised across demand customers. However, integration issues should be taken into consideration in order to avoid expansion of distributed generation in a way which unnecessarily raises total system costs, via high connection costs. -- Highlights: •Examination of the DG connection arrangements in Denmark, Germany and Sweden. •Sophisticated subsidy schemes for DG contrast with socialization of connection costs. •No evidence of novel business models for connecting DG units smartly
[en] This study explores different practices for accelerating the integration of generating facilities to the electricity network using smart solutions. Case studies from Great Britain, Republic of Ireland and Northern Ireland, and the Unites States of America were selected. The paper assesses and compares the different Principles of Access that have been implemented in these countries, such as Last-in First-out (LIFO), Pro Rata and Market-Based. The social optimality of these approaches is also discussed. The paper also evaluates how the risk (regarding curtailment and investment) is allocated between parties (distribution network operators, generators and customers). Even though the cases are diverse, important findings and lessons have been identified which may assist distribution network operators to address the issue of increasing the connection of distributed generation while managing efficiently and economically energy exports from generators. - Highlights: • This study explores different connection offers for intermittent generation. • We assess and compare the different Principles of Access for distributed generation. • We evaluate how the curtailment risk is allocated. • We offer lessons from Great Britain, Ireland and California
[en] 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. - Highlights: • This paper focuses on how to promote regional electricity cooperation. • We develop lessons based on comparison of four international case studies. • The cases highlight both the potential and difficulty of power pools. • We identify preconditions, institutional arrangements and timetabling. • We conclude that the future prospects for regional power pools are good.
[en] Electricity regulators around the world make use of efficiency analysis (or benchmarking) to produce estimates of the likely amount of cost reduction which regulated electric utilities can achieve. This short paper examines the use of such efficiency estimates by the UK electricity regulator (Ofgem) within electricity distribution and transmission price reviews. It highlights the place of efficiency analysis within the calculation of X factors. We suggest a number of problems with the current approach and make suggestions for the future development of X factor setting. (author)
[en] The purpose of this paper is to examine the lessons from the recent history of telecoms deregulation for electricity (and by implication heat) network regulation. We do this in the context of Ofgem's RPI-X-20 Review of energy regulation in the UK, which considers whether RPI-X-based price regulation is fit for purpose after over 20 years of operation in energy networks. We examine the deregulation of fixed line telecoms in the UK and the lessons which it seems to suggest. We then apply the lessons to electricity networks in the context of a possible increase in distributed generation directly connected to local distribution networks. We conclude that there is the possibility of more parallels over time and suggest several implications of this for the regulation of electricity and heat networks.
[en] This paper discusses the evidence on electricity reform and relates it to the current situation of the South East Europe (SEE) electricity market. We begin by discussing the main elements of the European Union (EU) electricity reform model. Then we go on to discuss emerging good practice in the regulation of national electricity markets in the EU. This is important because it reflects the key role placed on independent regulation of the electricity sector in the EU reform model. Next, we evaluate the empirical evidence on the success of the EU reform model in particular and the success of electricity reforms more generally. This leads on to a discussion of the particular context of SEE electricity reform and what specific issues this raises. We conclude with a discussion of the importance of more general institutional context of SEE electricity reform. The paper suggests that it will be a substantial, but worthwhile, challenge to create a workable supra-national electricity market in the region. (author)
[en] The purpose of this paper is to examine the lessons from the recent history of telecoms deregulation for electricity (and by implication heat) network regulation. We do this in the context of Ofgem's RPI-X rate at 20 review of energy regulation in the UK, which considers whether RPI-X-based price regulation is fit for purpose after over 20 years of operation in energy networks. We examine the deregulation of fixed line telecoms in the UK and the lessons which it seems to suggest. We then apply the lessons to electricity networks in the context of a possible increase in distributed generation directly connected to local distribution networks. We conclude that there is the possibility of more parallels over time and suggest several implications of this for the regulation of electricity and heat networks. (author)