A cost-benefit assessment of wholesale electricity restructuring and competition in New England

Barmack, Matthew; Kahn, Edward; Tierney, Susan

doi:10.1007/s11149-006-9022-8

Cited by 13 publications

(8 citation statements)

References 8 publications

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“…electricity generation, transmission, distribution, and system operator) in some form or another, may lead to numerous benefits such as increased system efficiency [5], [6], increased competition, increased private investment, and ultimately increased security of supply, reduced electricity costs and increased economic growth within a country [7], [8], [9], [10]. This notion is widely supported in first-world countries and based largely on industrial economics models and global trends towards free and liberalised markets, as discussed by Knops [11] and the US Congress [12].…”

Section: Introductionmentioning

confidence: 99%

Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry

Khan

Thopil

Lalk

2016

Renewable and Sustainable Energy Reviews

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South Africa's electricity supply industry (ESI) remains a vertically-integrated monopoly despite global trends towards restructuring. The monopolistic nature of the ESI could hinder the development of distributed power systems as penetration of renewable electricity increases. The research aims to rationalise South Africa's ESI evolution; propose practical power sector restructuring in the short-to-medium term; and to determine their potential impact. The research methodology included a single case study instrument, with embedded sub-units of analysis. Primary research data was gathered using semi-structured interviews with industry experts in addition to which secondary data from government documents and archival records were used for triangulation. Research results conclude that South Africa's ESI grew due to techno-economic industrialisation factors, while Apartheid-era policies influenced the ESI in only some specific respects. The vertically-integrated status quo was sustained in the post-transformation period due to government's focus on social imperatives; lack of regulatory & policy certainty; and conflicts in political ideology. South Africa didn't experience the pre-conditions that triggered global power sector reforms in the late 20 th century but these pre-conditions are now becoming evident. Privatisation of Eskom Generation and introduction of wholesale and retail competition are not practical in the short-to-medium term, proving the infeasibility of the standard model of reform locally. The introduction of an Independent System and Market Operator (ISMO) using a single-buyer model is seen as the most favourable and practical option, with the ISMO owning transmission infrastructure. The research suggests that ESI changes will increase system efficiencies, economic performance and private sector involvement, but will not reduce electricity tariffs. The scenarios, challenges and proposals identified in this research are also applicable to other countries in Africa and other developing regions of the world, that have similar social and political backgrounds, ensuring sustainable supply of electricity.

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Section: Introductionmentioning

confidence: 99%

Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry

Khan

Thopil

Lalk

2016

Renewable and Sustainable Energy Reviews

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“…Sensitivity analysis shows that potential replacement costs (the cost to replace power when the plant is short on coal) and/or revenue losses greatly affect the optimal strategy. Broader studies concerning the effects of U.S. electricity market restructuring are also present in the literature; examples include Hogan (2002) and Barmack et al (2007).…”

Section: Literature Reviewmentioning

confidence: 99%

Fuel inventory and price relationships in the U.S. electric power sector under regulatory and market change

Binder

Mjelde

2017

J Regul Econ

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Long-run relationships among coal inventories at U.S. electric power plants, corporate bond rates and coal, natural gas, and electricity prices are estimated over the period July 1976 to October 2014. Tests for constancy of the long-run relationships show periods of instability which coincide with major regulatory events in the electric power sector. Deregulation of the natural gas and electricity markets are likely sources of instability for the period mid-1994 to mid-2001. Additionally, inventory behavior may have had a smoothing effect over instability caused by natural gas prices during the recent U.S. shale boom. Policy makers should be aware that altering the regulatory environment can result in considerable fluctuations in how firms' inventory decisions interact with input and output markets and opportunity costs in the long run.

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“…One strand of this literature focuses on the importance of vertical arrangements between wholesale sellers and wholesale buyers to prevent the exercise of market power (Borenstein [2002]; Mansur [2007]; Bushnell, Mansur and Saravia [2008]; Bushnell [2007]), and on the ability of generation firms to exercise market power after restructuring (Borenstein and Bushnell [1999]; Borenstein, Bushnell and Wolak [2002]; Wolak [2003]). A second strand focuses on the impact of restructuring on generation efficiency and environmental impacts (Kleit and Tecrell [2001]; Fabrizio, Rose and Wolfram [2007]; Zhang [2007]; Barmack, Kahn and Tierney [2007]; Fowlie [2010]).…”

Section: Related Literaturementioning

confidence: 99%

Strategic Investment under Open Access: Theory and Evidence

Klumpp

2015

The J Industrial Economics

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We examine the incentives of access‐regulated firms to invest in infrastructure facilities they must share with competitors. We show that investment incentives can be decomposed into a non‐strategic and a strategic part. The non‐strategic part implies that investment depends positively on market size. The strategic incentives imply that investment also depends on market composition, namely, the market shares of the facility owner and its competitors. Using a dataset of regulated electric utilities in the United States, we find evidence that transmission investments are indeed made strategically. Ceteris paribus, utilities are less likely to invest, and investment levels are lower, when competitors occupy a larger share of the market.

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A cost-benefit assessment of wholesale electricity restructuring and competition in New England

Cited by 13 publications

References 8 publications

Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry

Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry

Fuel inventory and price relationships in the U.S. electric power sector under regulatory and market change

Strategic Investment under Open Access: Theory and Evidence

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