Download or read book Impact of Time of Use TOU Retail Pricing in an Electricity Market With Intermittent Renewable Resources written by Balram Avittathur and published by . This book was released on 2014 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The share of renewable energy in the overall production of electricity has been increasing in recent years. However, there are worries that increase in share of solar and wind power could destabilize the grid owing to their being intermittent resources. We explore the impact of a Time of Use (TOU) retail pricing in a capacitated and deregulated electricity market that is supplied from a finite mix of intermittent renewable and steady non-renewable resources. Our modelling attempts to address a research void by considering both demand (retail) and supply (renewable energy) as variable. An efficient feed-in-tariff (FIT) as identified in literature, where the FIT is linked to the wholesale price, is considered for energy procured from renewable sources. The FIT so considered ensures that that demand is met first by electricity from renewable sources, which is in line with sustainable energy arguments. Through a set of experiments the TOU retail pricing is compared with fixed retail pricing. Our models and the numerical experiments reinforce the existing literature that increasing share of renewable energy reduces energy prices under both pricing schemes. Our experiments indicate that with increasing share of renewable energy, and demand and supply uncertainties, TOU retail pricing results in higher meeting of demand, higher expected revenues for the energy firms and higher utilization of non-renewable supply. Our experiments also indicate that fall in prices that occurs as a consequence of increasing share of renewable energy is lesser in TOU pricing compared to fixed pricing, which makes it less disadvantageous to existing non-renewable energy suppliers and potential investments in non-renewable energy. Through these results and arguments we conclude that TOU retail pricing is superior to fixed retail pricing in the context of increasing share of renewable energy, and uncertainties in demand and supply.

Download or read book An Analysis of Time Based Pricing in Retail Electricity Markets written by Baris Ata and published by . This book was released on 2018 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Problem Definition: We empirically evaluate the short-term effects of time-based tariffs on the electricity demand, consumer welfare, retailers and the environment.Academic/Practical Relevance: Electricity retailers around the world have been introducing time-based pricing programs. We study the short-term impact of such tariffs empirically.Methodology: We build a structural estimation model of household electricity demand and analyze a data set from an Irish field experiment, consisting of the half-hourly electricity consumption of over three thousand households, combined with the wholesale price, system load and generation data. Using the estimates from the structural model, we conduct a counterfactual study to explore various questions of practical importance.Results: Our empirical analysis reveals that focusing on the peak-load reduction metric, one can design a flexible time-of-use (TOU) tariff that is simple and predictable yet performs as well as real-time pricing (RTP) given a fixed time horizon for evaluation. The annual electricity bills of consumers decrease only slightly when they switch from the flat rate to time-based tariffs, but there can be significant volatility in month to month bills under time-based tariffs. In contrast, the more flexible a tariff in terms of pricing, the less volatility it creates in retailer's profits throughout the year. Finally, switching from the flat rate to time-based tariffs would not change the carbon dioxide emissions from electricity generation in Ireland significantly.Managerial Implications: We find that time-based tariffs are effective in peak load reduction. However, the most appropriate time-based tariff depends on the context. If the goal is mitigating demand spikes over very short time spans, e.g. hours, then RTP is the most effective one. If the performance-relevant time horizon is longer, e.g. a month or a season, then a carefully designed TOU tariff with pre-determined rates can be just as effective as RTP. Consumers and retailers are largely unaffected by time-based tariffs which suggests that their adoption may be harder under opt-in policies, compared to opt-out policies. From an environmental perspective, our result that the carbon dioxide emissions do not increase facilitates the adoption of time-based tariffs.

Download or read book Electricity Pricing in Transition written by Ahmad Faruqui and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 372 pages. Available in PDF, EPUB and Kindle. Book excerpt: Electricity Pricing In Transition is written to address the new issues facing utilities, retailers, regulators, and customers in the changing electricity market. It is organized into five sections. Section I deals with the new restructured organization that has emerged from yesterday's vertically integrated, regulated monopoly company. Section II deals with issues in competitive pricing. Section III reviews the role of demand response and product design in today's chaotic marketplace. Given the single importance of California's energy crisis and the fact that it will be studied for years to come, Section IV is devoted to studying the lessons learned from this crisis. The final section of the book deals with markets and regulations. This book will provide practitioners with guidance on how to avoid the major pitfalls in pricing electricity while the market is in transition by drawing upon the insights and lessons learned from the experience of others that are documented in this book.

Download or read book The Impact of Intermittent Power Generation on the Wholesale Electricity Prices of the Mibel Iberian Market written by Paulo Pereira da Silva and published by . This book was released on 2018 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: By means of regression analysis, we address the price impact of intermittent renewable energy sources (wind, solar and waves) for the Mibel Iberian Market (Portugal and Spain) during the period spanning from 2010 to 2015. Our results suggest that: i) intermittent renewable energy has a material negative effect on electricity price; ii) the merit-order effect varies depending on the technology employed: wind power appears to produce a greater impact on price vis-à-vis solar photovoltaic energy; iii) there is no evidence corroborating the idea that the impact of intermittent renewable electricity penetration is declining over time; and iv) the market coupling with France, in effect since May 2014, led to a decrease in the sensitivity of price to intermittent renewable energy production. Our results are useful for risk management purposes and to support policy-makers and utilities in defining the optimal generation mix.

Download or read book The Future of Electricity Retailing and How We Get There written by Frank A. Wolak and published by Springer Nature. This book was released on 2021-09-28 with total page 174 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book covers the current trends and challenges faced by regulators, policymakers, and researchers in the field of retail electricity market design and regulation. It addresses the role that “smart” technologies are playing in reshaping how utilities and consumers interact with each other and with their generating technologies. The book covers topics including smart meter adoption, dynamic pricing, demand response, distributed and utility-scale solar, technology costs trends, and the microeconomic theory that governs our understanding of retailer and consumer incentives. Existing inefficiencies of transmission and distribution network pricing as well as the potential regulatory approaches that can be used to remedy them are discussed along with the advantages of retail competition and draw attention to the barriers that currently are preventing all of the benefits of retail competition from materializing. The book uses very recent data to provide the most up-to-date overview of retailing trends and policies in the USA, Europe, Asia, Oceania, and Latin America. The book will be useful for researchers and regulators and policymakers.

Download or read book Effect of Real time Electricity Pricing on Renewable Generators and System Emissions written by Jeremiah Peter Connolly and published by . This book was released on 2008 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: Real-time retail pricing (RTP) of electricity, in which the retail price is allowed to vary with very little time delay in response to changes in the marginal cost of generation, offers expected short-run and long-run benefits at the societal level. While the effects of RTP on most market participants have been examined previously, its effects on a) renewable generator revenues and b) power sector emissions are not well understood. This thesis presents a counterfactual model of the new England wholesale power market, including within-hour consumer price response, to analyze revenues under RTP for four renewable test cases and emissions of CO2, SO2, and NOx. Assuming a moderate consumer price-response ( e = -0.3), I find that revenues for both wind and solar cases will decrease by about 3%, a smaller loss than that expected by the generation sector as a whole (~ 6%) or by peak generators ( ~ 55%). In the same scenario, RTP is expected to decrease emissions of CO2, SO2, and NOx by 2-3% in the short-run. These results are qualitatively robust across a range of elasticities and other input parameters. A discussion of the political barriers to RTP highlights interest group pressure from peak generators and the framing of gains and losses for consumers. These barriers are likely to attract significant policymaker attention in RTP discussions, but the results of my empirical analysis show the need to also consider how RTP may interfere with the ability to achieve other policy objectives, including promoting renewable energy and reducing emissions.

Download or read book Real Time Pricing and Deregulating the Electricity Market written by David Leinweber and published by . This book was released on 1980 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Real-time pricing of electricity may result in major efficiency improvements in the consumption and production of electric power. It can be realized by using current microelectronic technology to implement a dynamic power marketplace, with low entrance barriers and adaptive pricing reflecting the marginal costs of generation. A complex and interrelated set of technical, political, economic, and regulatory questions surround the notion of real-time pricing of electricity. They are briefly outlined in this paper. A current bibliography of material relevant to these studies is also included. (Author).

Download or read book When Time is Money The Impact of Time of Use Electricity Rates on Energy Burden for Low Income Households written by Julia M. Hegarty and published by . This book was released on 2022 with total page 104 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the U.S. embarks on a historic transition to clean, renewable-based energy, utilities must grapple with new systems to control demand for electricity. One method is using time-of-use (TOU) rates, which increase the price of electricity during high demand periods, and decrease the price during periods of high renewable availability. These rates can be useful in encouraging homeowners to shift energy consumption like water heating, dishwashing, and air conditioning to midday, when solar energy is available. However, there is concern that low-income families, who are less likely to have flexible work schedules or new appliances with load shifting capabilities, may face higher costs due to these programs. In this thesis, I examine energy burden across America, to see if counties where TOU rates have been implemented have higher average energy burden for low-income households. Controlling for energy efficiency characteristics and ratepayer characteristics, I find that the average energy burden is lower for low-income households in counties that offer TOU rates. This result indicates that those TOU programs that were active in the period of observation did not impose a significant burden on those most vulnerable to high energy costs.

Download or read book The Impact of Variable Renewables on the Distribution of Hourly Electricity Prices and Their Variability written by Kyriaki Tselika and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Intermittent Renewable Integration in Electricity Market Design written by Cody Hohl and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores the impact of intermittent renewable integration in electricity market design. U.S. electricity markets adopt a two-settlement structure with day-ahead and real-time markets. Wind power integration poses a challenge for this market structure because day-ahead wind production forecasts are uncertain and significant rescheduling costs may occur in real time, increasing the need for out-of-market uplift payments. Chapters 2 and 3 investigate whether a multi-settlement structure, where participants can re-trade their forward positions in multiple intraday stages between the day-ahead and real-time markets, reduces uplift payments and system costs, relative to a two-settlement structure. Chapter 2 implements unit commitment and dispatch models that account for intertemporal constraints and are solved on a 36-node test system using historical wind forecasts provided by a Regional Transmission Organization (RTO), as well as synthetic wind forecasts reproducing the observed correlation in the historical data. The performance of market designs are compared across varying levels of wind penetration, where it is found that transitioning from the current two-settlement design to the proposed multi-settlement design may not improve efficiency in power system operations, and RTOs should not use their own forecasts to represent wind power generation for unit commitment and dispatch decisions. Chapter 3 develops laboratory experiments for the two-settlement and multi-settlement structures, where participants play the role of electricity generating companies who sell electricity into the market through a uniform price auction. Unit commitment and dispatch models are used to clear the market and compare the performance of both market designs under varying levels of wind penetration. Results show there is no significant difference in the performance of each market design due to participants not following their wind forecast signals. Chapter 4 examines resource adequacy and revenue sufficiency under two market designs and increasing levels of wind penetration. A capacity market structure provides an incentive for electricity suppliers to invest in new capacity through payments determined in a centralized capacity auction, while an energy-only market structure provides an incentive for electricity suppliers to invest in new capacity through high energy price caps and an operating reserve demand curve (ORDC) price adder mechanism. Equilibrium and mixed integer models are formulated to compare market performance under natural gas price, wind forecast, and demand uncertainty. Results from both market structures are evaluated on a test system comprised of seven nodes, six generators, and ten transmission lines, and show that only modern natural gas generating technologies have incentive to invest in new capacity.

Download or read book Potential impact of partial retail price feed in tariffs on a solar rebound effect in Germany written by Jonte Buchholz and published by GRIN Verlag. This book was released on 2022-12-22 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2020 in the subject Economy - Environment economics, grade: 1,3, Christian-Albrechts-University of Kiel, language: English, abstract: In order to contribute to an understanding of the impact of the so called ‘solar-rebound effect’ (SRE) as described by Oliver et al. (2019), it is the goal of this paper to formulate a hypothesis regarding the potential impact of partial electricity retail price (ERP) feed-in-tariffs (FiT) on this effect in Germany, drawing on the theoretical model developed by Oliver alii (2019) and on empirical insights regarding the SRE, observed in Phoenix (Arizona) by Qiu alii (2019) and in Sydney by Deng & Newton (2017). Therefore, the research question that I would like to answer in the following argumentation, is: Has the policy measure of the Renewable Energy Sources Act (EEG) feed-in tariff scheme an impact on the solar-rebound effect in Germany, and does the mechanism mitigate or intensify the SRE compared to solar rebound effects observed in Arizona by Qiu et al. (2019) and in Australia by Deng & Newton (2017)? In Germany, there are a variety of different legal mechanisms applied to support the installation and usage of renewable energy. The most important one being the Renewable Energy Sources Act (EEG) which is widely acknowledged and adopted as a model by other countries. The regulation led to an increase of the portion of renewable energy on total gross electricity consumption in Germany from 2009 to 2019. In 2019 renewables had a share of 43% on gross electricity consumption, of which 8.2% were generated by solar systems. Approximately 1/3 of the total amount of photovoltaic (PV) power production capacity in Germany is owned by private households, which are acting as prosumers. These numbers underscore the importance to understand effects on residential photovoltaic system usage to implement effective policies in line with climate objectives.

Download or read book Wealth Transfer from Implementing Real time Retail Electricity Pricing written by Severin Borenstein and published by . This book was released on 2005 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Adoption of real-time electricity pricing--retail prices that vary hourly to reflect changing wholesale prices--removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data on a random sample of 636 industrial and commercial customers in southern California, I show that RTP adoption would result in significant transfers compared to a flat-rate tariff. When compared to the time-of-use rates (simple peak/offpeak tariffs) that these customers already face, however, the transfers drop by nearly half; even under the more extreme price volatility scenario that I examine, 90% of customers would see changes of between a 9% bill reduction and a 14% bill increase. Though customer price responsiveness reduces the loss incurred by those with high-cost demand profiles, I also demonstrate that this offsetting effect is unlikely to be large enough for most customers with costly demand patterns to completely offset their lost cross-subsidy. The analysis suggests that adoption of real-time pricing may be difficult without a supplemental program that compensates the customers who are made worse off by the change. I discuss how "two-part RTP" programs, which allow customers to purchase a baseline quantity at regulated TOU rates, can reduce the transfers associated with adoption of RTP"--National Bureau of Economic Research web site.

Download or read book Spot Pricing of Electricity written by Fred C. Schweppe and published by Springer Science & Business Media. This book was released on 2013-03-07 with total page 362 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is a need for fundamental changes in the ways society views electric energy. Electric energy must be treated as a commodity which can be bought, sold, and traded, taking into account its time-and space-varying values and costs. This book presents a complete framework for the establishment of such an energy marketplace. The framework is based on the use of spot prices. In general terms: o An hourly spot price (in dollars per kilowatt hour) reflects the operating and capital costs of generating, transmitting and distributing electric energy. It varies each hour and from place to place. o The spot price based energy marketplace involves a variety of utility-customer transactions (ranging from hourly varying prices to long-term, multiple-year contracts), all of which are based in a consistent manner on hourly spot prices. These transactions may include customers selling to, as well as buying from, the utility. The basic theory and practical implementation issues associated with a spot price based energy marketplace have been developed and discussed through a number of different reports, theses, and papers. Each addresses only a part of the total picture, and often with a somewhat different notation and terminology (which has evolved in parallel with our growing experience). This book was xvii xviii Preface written to serve as a single, integrated sourcebook on the theory and imple mentation of a spot price based energy marketplace.

Download or read book Chasing the Sun and Catching the Wind Energy Transition and Electricity Prices in Europe written by Mr. Serhan Cevik and published by International Monetary Fund. This book was released on 2022-11-04 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: European power markets are in the midst of unprecedented changes, with a record-breaking surge in energy prices.This paper investigates the impact of green power resources on the level and volatility of wholesale electricity prices at a granular level, using monthly observations for a panel of 24 European countries over the period 2014–2021 and alternative estimation methods including a panel quantile regression approach. We find that renewable energy is associated with a significant reduction in wholesale electricity prices in Europe, with an average impact of 0.6 percent for each 1 percentage points increase in renewable share. We also find evidence for a nonlinear effect—that is, higher the share of renewables, the greater its effect on electricity prices. On the other hand, while quantile estimation results are mixed with regards to the impact of renewables on the volatility of electricity prices, we obtain evidence that renewable energy has a negative effect on volatility at the highest quantiles. Overall, our analysis indicates that policy reforms can help accelerate the green transition while minimizing the volatility in electricity prices.

Download or read book Analysing the Impact of Renewable Energy Regulation on Retail Electricity Prices written by Pablo del Río and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Real Time Pricing as a Default Or Optional Service for C ICustomers written by Charles Goldman and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Demand response (DR) has been broadly recognized to be an integral component of well-functioning electricity markets, although currently underdeveloped in most regions. Among the various initiatives undertaken to remedy this deficiency, public utility commissions (PUC) and utilities have considered implementing dynamic pricing tariffs, such as real-time pricing (RTP), and other retail pricing mechanisms that communicate an incentive for electricity consumers to reduce their usage during periods of high generation supply costs or system reliability contingencies. Efforts to introduce DR into retail electricity markets confront a range of basic policy issues. First, a fundamental issue in any market context is how to organize the process for developing and implementing DR mechanisms in a manner that facilitates productive participation by affected stakeholder groups. Second, in regions with retail choice, policymakers and stakeholders face the threshold question of whether it is appropriate for utilities to offer a range of dynamic pricing tariffs and DR programs, or just ''plain vanilla'' default service. Although positions on this issue may be based primarily on principle, two empirical questions may have some bearing--namely, what level of price response can be expected through the competitive retail market, and whether establishing RTP as the default service is likely to result in an appreciable level of DR? Third, if utilities are to have a direct role in developing DR, what types of retail pricing mechanisms are most appropriate and likely to have the desired policy impact (e.g., RTP, other dynamic pricing options, DR programs, or some combination)? Given a decision to develop utility RTP tariffs, three basic implementation issues require attention. First, should it be a default or optional tariff, and for which customer classes? Second, what types of tariff design is most appropriate, given prevailing policy objectives, wholesale market structure, ratemaking practices and standards, and customer preferences? Third, if a primary goal for RTP implementation is to induce DR, what types of supplemental activities are warranted to support customer participation and price response (e.g., interval metering deployment, customer education, and technical assistance)?

Download or read book Simplified Electricity Market Models with Significant Intermittent Renewable Capacity written by Christoph Graf and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using hourly offer curves from the Italian day-ahead market and the real-time re-dispatch market for the period January 1, 2017 to December 31, 2018, we show how thermal generation unit owners are able to profit from differences between a simplified day-ahead market design that ignores system security constraints as well as generation unit operating constraints, and real-time system operation where these constraints must be respected. We find that thermal generation unit owners increase or decrease their day-ahead offer prices depending on the probability that their final output will be increased or decreased relative to their day-ahead schedules because of real-time operating constraints. First, we estimate generation unit-level models of the probability of each of these outcomes conditional on forecast demand and renewable production in Italy and neighboring countries. Our most conservative estimate of the impact of a change in the probability a unit owner will have its day-ahead schedule increased in the real-time re-dispatch market implies a day-ahead offer price increase of 5 EUR/MWh if this probability changes by 0.1. If the probability of a day-ahead schedule decrease rises by 0.1 the unit owner's offer price is predicted to be 6 EUR/MWh less. Over our sample period, we find that the economic re-dispatch cost averaged approximately 15% of the total cost of energy consumption valued at the day-ahead price.