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00402 Economic inefficiency of passive transmission rights in congested electricity systems with competitive generation
06
Electrical power supply and utilization (economics, policy, supplies, forecasts)
Economic inefficiency of passive transmission 98100402 rights in congested electricity systems with competitive generation Oren, S. S. The Energy Journal, 1997, 18, (1) 63-83. Passive transmission rights such as transmission congestion contracts (TCCs) that are compensated ex-post based on nodal prices resulting from optimal dispatch by an independent system operator (ISO) will be preempted by the strategic bidding of the generators. Even when generation is competitive, rational expectations of congestion will thus induce implicit collusion enabling generators to raise their bids above marginal costs and capture the congestion rents, leaving the TCCs uncompensated. These conclusions are based on a Cournot model of competition across congested transmission links where an IS0 dispatches generators optimally based on bid prices. The Cournot equilibrium in congested electricity networks is characterized with two and three nodes. Absent active transmission rights trading may mean the resulting equilibrium may be at an inefficient dispatch and congestion rents will be captured by the generators. It is also demonstrated how trading of transmission rights in parallel with a competitive energy market can prevent the price distortion and inefficient dispatch associated with passive transmission rights. EDSSF: a decision support system (DSS) for 98100403 electricity peak-load forecasting Badri, M. A. et al. Energy, 1997, 22, (6), 579-589. In the UAE, electricity authorities have found little success in developing reliable and accurate models of system peak load. In this study, a timeseries-based decision-support system that integrates data management, model base management, simulation, graphic display, and statistical analysis to provide near-optimal forecasting models is developed. The model base includes a variety of time-series techniques, such as exponential smoothing, Box-Jenkins (BJ), and dynamic regression. The system produces short-term forecasts (one year ahead) by analysing the behaviour of monthly peak loads. The performance of the DSS is validated through a comparison with results suggested by econometricians. The efficiency of the National Electricity Board in 98100404 Malaysia: an intercountry comparison using DEA Yunos, J. M. and Hawdon, D. Energy Economics, 1997, 19, (Z), 151-270. One of the most pressing questions facing developing countries and the international agencies that finance their economic programmes is the appropriate way in which to operate and manage their power industries. This paper focuses on one aspect of economic performance, namely the efficiency with which electricity is generated. Evidence suggests that changes in the organization of electricity generation can be justified on efficiency grounds. Data envelopment analysis (DEA) is used to compare the performance of Malaysia’s National Electricity Board with those of other countries in a similar stage of development, as well as with that of the UK. An institutional design for an electricity contract 98100405 market with central dispatch Chao, H.-P. and Peck, S. The Energy Journal, 1997, 18, (1). 83-110. In 1996, the authors introduced a new approach to the design of an efficient electricity market that incorporates externalities due to loop flows. This approach enables an innovative flow-based bidding scheme for pricing transmission services. In the short term, due to some technological constraints, a hybrid institutional structure that encompasses a decentralized contract market is necessary for implementation. An incentive scheme that fosters efficiency and reliability within such an institutional structure is presented. It is essential that the system operator provides all electricity traders choices of priority insurance against interruptions. This scheme will ensure the integrity of the electrical contract market and provide the system operator incentives to maintain system reliability in an efficient manner in real-time dispatch. A market power model with strategic interaction in 88lOO406 electricity networks Hogan, W. W. The Energy Journal, 1997, 18, (4), 107-141. In an electric network, when the flow of power is limited by transmission constraints, there are likely to be strong interaction effects across different parts of the system. A model of imperfect competition with strategic interactions in an electricity transmission network illustrates a possible exercise of market power that differs from the usual analysis of imperfect competition in more familiar product markets. Horizontal market power could be exercised by large firms by increasing their own production, lowering some prices, and exploiting the necessary feasibility constraints in the network to foreclose competition from others. This behaviour relies on the special properties of electric networks, and reinforces the need for market analysis with more realistic network models. Open access vs. common carriage in electricity 98100407 supply Brunekreeft, G. Energy Economics, 1997, 19, (2) 225-238. The question of whether the upstream infrastructure monopolist in electricity transmission should be allowed to participate on the downstream generation market is addressed. The central assumption is that the downstream market is characterized by a U-shaped AC curve. Under this assumption, it is shown that the unregulated upstream monopolist has an incentive for partial forward integration. S/he will, however, not have an
34
Fuel and Energy Abstracts
January 1998
incentive to foreclose fully the downstream market. Furthermore, it will be shown that allowing the upstream monopolist to be active on the downstream market is better than not. In other words, under the assumptions of the model, open access will be superior to common carriage. Optimal tariff design under consumer self-selection 98100408 Rasanen, M. er al. Energy Economics, 1997, 19, (2). 151-167. The design of electricity tariffs to guide an individual consumer to select the tariff designed for his/her consumption pattern is given attention in this paper. In the model, the utility maximizes the weighted sum of individual consumers’ benefits of electricity consumption subject to the utility’s revenue requirement constraints. The consumers’ free choice of tariffs is ensured with the so-called ‘self-selection constraints’. The relationship between the consumers’ optimal choice of tariffs and the weights in the aggregated consumers benefit function is analysed. If such weights exist, then they will guarantee the consumers’ optimal choice of tariffs and the efficient consumption patterns. Also analysed are the welfare effects, by using demand parameters estimated from a Finnish dynamic pricing experiment. The results indicate that it is possible to design an efficient tariff menu with the welfare losses caused by the self-selection constraints being small compared with the costs created when some consumers choose tariffs other than those assigned for them. Optimum long-term planning of a radial primary 98100409 distribution network-part I: data description and first proposed network form Salis, G. J. and Safigianni, A. S. Electrical Power and Eneqy Systems, 1998, 20, (I), 35-41. The proposed algorithm facilitates the techno-economically optimum longterm planning of a radial primary power distribution network. It deals with the proper conductor selection for the network segments and is completed in two parts. Load data, necessary economic functions and technical constraints, which are taken into account during the planning procedure, are given in this Part I. New quantities, such as the long-term economic conductor capacity and sets of allowable conductor selections for every network segment, accompanied by their possible replacement years, are also determined here. Completed in part II, a network form is finally proposed as the first step of the long-term planning procedure. Optimum long-term planning of a radial primary 98100410 distribution network-part II: development of the optimum longterm planning method Salis, G. J. and Safigianni, A. S. Electrical Power and Energy Systems, 1998, 20, (l), 43-51. An algorithm for optimum long-term planning is developed, taking into account the locations and the time variation of the load served by the examined network, techno-economical constraints and functions given in part I of this paper and previous papers of the authors. Finally, a network form is proposed, selecting the proper conductors for the network segments and concrete years with the kinds of specific improvements to which this form must be subject inside the specific plan period in order to satisfy the continuous growing load by the most techno-economically desirable method. Quad E project-planning and engineering issues 98loo411 Guerra, C. R. and Marcum, J. M. Proc. Int. Tech. Conf. Coal Ufif. Fuel Syst., 1993, 18th, 107-118. The objective of the Eastern European Electricity Exports (Quad-E) is power generation at a selected site in Eastern Europe or the NIS (New Independent States) to supply in-country electricity demand and to provide for power export to a Western European country. It is envisioned that power will be generated using Clean Coal Technology at a repowered or greenfield site. This paper describes general planning and engineering issues that need to be considered in the process of selecting a suitable combination of power exporter and power purchaser, considering uncertainties and variables. The Quad E Project is presently under study by EIT and Burns and Roe. 98100412 The role of electricity in sustainable development Spradley, J. R., Jr. and Fang, W. L. Natural Resources Forum, 21, (l), 6167. Electricity seems to have potential as the cleaner fuel of the future, according to current projections estimating world population growth read in conjunction with corresponding projections of increased world energy consumption. This is especially due to its high efficiency and low levels of pollution. As the electrical end-use devices are considerably more efficient than those using other forms of energy, most developed countries show decreasing curves of energy intensity as technologies become more sophisticated and become more reliant on electricity. The article suggests a gradual shift away from fossil fuels to electricity is a promising possibility to lower global air pollution and emissions of greenhouse gases to acceptable levels. Overall gains in energy efficiency from the change over from fossil fuels to electricity, are possible even in situations where the electricity is generated by fossil fuel combustion, despite the loss of primary energy in the conversion process. The article also presents electricity generating projects designed for developing countries and countries with economies in transition. The generation of electricity from the combustion of renewable sources, fossil fuels, and other innovative methods are outlined.
Electrical power supply and utilization (economics, policy, supplies, forecasts)
Economic inefficiency of passive transmission 98100402 rights in congested electricity systems with competitive generation Oren, S. S. The Energy Journal, 1997, 18, (1) 63-83. Passive transmission rights such as transmission congestion contracts (TCCs) that are compensated ex-post based on nodal prices resulting from optimal dispatch by an independent system operator (ISO) will be preempted by the strategic bidding of the generators. Even when generation is competitive, rational expectations of congestion will thus induce implicit collusion enabling generators to raise their bids above marginal costs and capture the congestion rents, leaving the TCCs uncompensated. These conclusions are based on a Cournot model of competition across congested transmission links where an IS0 dispatches generators optimally based on bid prices. The Cournot equilibrium in congested electricity networks is characterized with two and three nodes. Absent active transmission rights trading may mean the resulting equilibrium may be at an inefficient dispatch and congestion rents will be captured by the generators. It is also demonstrated how trading of transmission rights in parallel with a competitive energy market can prevent the price distortion and inefficient dispatch associated with passive transmission rights. EDSSF: a decision support system (DSS) for 98100403 electricity peak-load forecasting Badri, M. A. et al. Energy, 1997, 22, (6), 579-589. In the UAE, electricity authorities have found little success in developing reliable and accurate models of system peak load. In this study, a timeseries-based decision-support system that integrates data management, model base management, simulation, graphic display, and statistical analysis to provide near-optimal forecasting models is developed. The model base includes a variety of time-series techniques, such as exponential smoothing, Box-Jenkins (BJ), and dynamic regression. The system produces short-term forecasts (one year ahead) by analysing the behaviour of monthly peak loads. The performance of the DSS is validated through a comparison with results suggested by econometricians. The efficiency of the National Electricity Board in 98100404 Malaysia: an intercountry comparison using DEA Yunos, J. M. and Hawdon, D. Energy Economics, 1997, 19, (Z), 151-270. One of the most pressing questions facing developing countries and the international agencies that finance their economic programmes is the appropriate way in which to operate and manage their power industries. This paper focuses on one aspect of economic performance, namely the efficiency with which electricity is generated. Evidence suggests that changes in the organization of electricity generation can be justified on efficiency grounds. Data envelopment analysis (DEA) is used to compare the performance of Malaysia’s National Electricity Board with those of other countries in a similar stage of development, as well as with that of the UK. An institutional design for an electricity contract 98100405 market with central dispatch Chao, H.-P. and Peck, S. The Energy Journal, 1997, 18, (1). 83-110. In 1996, the authors introduced a new approach to the design of an efficient electricity market that incorporates externalities due to loop flows. This approach enables an innovative flow-based bidding scheme for pricing transmission services. In the short term, due to some technological constraints, a hybrid institutional structure that encompasses a decentralized contract market is necessary for implementation. An incentive scheme that fosters efficiency and reliability within such an institutional structure is presented. It is essential that the system operator provides all electricity traders choices of priority insurance against interruptions. This scheme will ensure the integrity of the electrical contract market and provide the system operator incentives to maintain system reliability in an efficient manner in real-time dispatch. A market power model with strategic interaction in 88lOO406 electricity networks Hogan, W. W. The Energy Journal, 1997, 18, (4), 107-141. In an electric network, when the flow of power is limited by transmission constraints, there are likely to be strong interaction effects across different parts of the system. A model of imperfect competition with strategic interactions in an electricity transmission network illustrates a possible exercise of market power that differs from the usual analysis of imperfect competition in more familiar product markets. Horizontal market power could be exercised by large firms by increasing their own production, lowering some prices, and exploiting the necessary feasibility constraints in the network to foreclose competition from others. This behaviour relies on the special properties of electric networks, and reinforces the need for market analysis with more realistic network models. Open access vs. common carriage in electricity 98100407 supply Brunekreeft, G. Energy Economics, 1997, 19, (2) 225-238. The question of whether the upstream infrastructure monopolist in electricity transmission should be allowed to participate on the downstream generation market is addressed. The central assumption is that the downstream market is characterized by a U-shaped AC curve. Under this assumption, it is shown that the unregulated upstream monopolist has an incentive for partial forward integration. S/he will, however, not have an
34
Fuel and Energy Abstracts
January 1998
incentive to foreclose fully the downstream market. Furthermore, it will be shown that allowing the upstream monopolist to be active on the downstream market is better than not. In other words, under the assumptions of the model, open access will be superior to common carriage. Optimal tariff design under consumer self-selection 98100408 Rasanen, M. er al. Energy Economics, 1997, 19, (2). 151-167. The design of electricity tariffs to guide an individual consumer to select the tariff designed for his/her consumption pattern is given attention in this paper. In the model, the utility maximizes the weighted sum of individual consumers’ benefits of electricity consumption subject to the utility’s revenue requirement constraints. The consumers’ free choice of tariffs is ensured with the so-called ‘self-selection constraints’. The relationship between the consumers’ optimal choice of tariffs and the weights in the aggregated consumers benefit function is analysed. If such weights exist, then they will guarantee the consumers’ optimal choice of tariffs and the efficient consumption patterns. Also analysed are the welfare effects, by using demand parameters estimated from a Finnish dynamic pricing experiment. The results indicate that it is possible to design an efficient tariff menu with the welfare losses caused by the self-selection constraints being small compared with the costs created when some consumers choose tariffs other than those assigned for them. Optimum long-term planning of a radial primary 98100409 distribution network-part I: data description and first proposed network form Salis, G. J. and Safigianni, A. S. Electrical Power and Eneqy Systems, 1998, 20, (I), 35-41. The proposed algorithm facilitates the techno-economically optimum longterm planning of a radial primary power distribution network. It deals with the proper conductor selection for the network segments and is completed in two parts. Load data, necessary economic functions and technical constraints, which are taken into account during the planning procedure, are given in this Part I. New quantities, such as the long-term economic conductor capacity and sets of allowable conductor selections for every network segment, accompanied by their possible replacement years, are also determined here. Completed in part II, a network form is finally proposed as the first step of the long-term planning procedure. Optimum long-term planning of a radial primary 98100410 distribution network-part II: development of the optimum longterm planning method Salis, G. J. and Safigianni, A. S. Electrical Power and Energy Systems, 1998, 20, (l), 43-51. An algorithm for optimum long-term planning is developed, taking into account the locations and the time variation of the load served by the examined network, techno-economical constraints and functions given in part I of this paper and previous papers of the authors. Finally, a network form is proposed, selecting the proper conductors for the network segments and concrete years with the kinds of specific improvements to which this form must be subject inside the specific plan period in order to satisfy the continuous growing load by the most techno-economically desirable method. Quad E project-planning and engineering issues 98loo411 Guerra, C. R. and Marcum, J. M. Proc. Int. Tech. Conf. Coal Ufif. Fuel Syst., 1993, 18th, 107-118. The objective of the Eastern European Electricity Exports (Quad-E) is power generation at a selected site in Eastern Europe or the NIS (New Independent States) to supply in-country electricity demand and to provide for power export to a Western European country. It is envisioned that power will be generated using Clean Coal Technology at a repowered or greenfield site. This paper describes general planning and engineering issues that need to be considered in the process of selecting a suitable combination of power exporter and power purchaser, considering uncertainties and variables. The Quad E Project is presently under study by EIT and Burns and Roe. 98100412 The role of electricity in sustainable development Spradley, J. R., Jr. and Fang, W. L. Natural Resources Forum, 21, (l), 6167. Electricity seems to have potential as the cleaner fuel of the future, according to current projections estimating world population growth read in conjunction with corresponding projections of increased world energy consumption. This is especially due to its high efficiency and low levels of pollution. As the electrical end-use devices are considerably more efficient than those using other forms of energy, most developed countries show decreasing curves of energy intensity as technologies become more sophisticated and become more reliant on electricity. The article suggests a gradual shift away from fossil fuels to electricity is a promising possibility to lower global air pollution and emissions of greenhouse gases to acceptable levels. Overall gains in energy efficiency from the change over from fossil fuels to electricity, are possible even in situations where the electricity is generated by fossil fuel combustion, despite the loss of primary energy in the conversion process. The article also presents electricity generating projects designed for developing countries and countries with economies in transition. The generation of electricity from the combustion of renewable sources, fossil fuels, and other innovative methods are outlined.