Irish and British electricity prices: what recent history implies for future prices

Deane, Paul; FitzGerald, John; Valeri, Laura Malaguzzi; Tuohy, Aidan; Walsh, Darragh

doi:10.5547/2160-5890.3.2.pdea

Cited by 17 publications

(10 citation statements)

References 17 publications

(21 reference statements)

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“…It is more than 3.5 times larger than the cost of REFIT per MWh. This is consistent with other analyses comparing the renewable subsidy costs in the two jurisdictions (Deane et al, 2015) and 18 For an explanation of why the buy-out fee is reasonable approximation of the cost of ROCs to consumers, see for example Bryan et al (2015). may be one of the reasons the UK is moving to a feed-in tariff support system starting in 2017.…”

Section: Wind Subsidiessupporting

confidence: 76%

Wind, Storage, Interconnection and the Cost of Electricity Generation

Cosmo

Valeri

2017

SSRN Journal

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We evaluate how increasing wind generation affects wholesale electricity prices, balancing payments and the cost of subsidies using the Irish Single Electricity Market (SEM) as a test system, with hourly data from 1 January 2008 to 28 August 2012. We model the spot market using a system of seemingly unrelated regressions (SUR) where the regressions are the 24 hours of the day. Wind has a negative impact on the system marginal price, with every MWh increase in wind generation (equal to about 0.2% of the average wind generation in our sample) leading to a decrease of the system marginal price of €0.018/MWh, or about 0.3% of its average value. We use time series models to analyse the balancing market and show that wind generation increases balancing payments, as do the forecast errors of demand and wind. Every MWh of additional wind generation is associated with an increase in constraint payments of €3.2, or about 0.01%. Lack of storage increases the impact of wind on balancing payments whereas the lack of interconnection has no effect. Overall, wind decreases costs through its effect on the electricity price more than it increases constraint payments, even when storage is on outage. The effect of wind remains positive after including the cost of subsidies given to wind generation.

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Section: Wind Subsidiessupporting

confidence: 76%

Wind, Storage, Interconnection and the Cost of Electricity Generation

Cosmo

Valeri

2017

SSRN Journal

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“…In Plexos the interconnection flows are driven by the shadow price and as result, in our model SEM is a net exporter. This is not confirmed by historical data, as shown by Deane et al (2013), which finds that BETTA prices are substantially lower than SEM prices for the period [2008][2009][2010][2011]. Consequently the analysis here should be taken as an upper bound estimate of the potential effects on the interconnection flows.…”

mentioning

confidence: 74%

“…Transmissions capacity auctions are persistently undersubscribed, and transmissions rights acquired are not fully used [McInerney and Bunn (2013)]. This occurs even though there are significant price differentials between the SEM and BETTA markets, as noted by Deane et al (2013). There are also significant power flows on the SEM-BETTA interconnectors against the efficient price spread direction, which McInerney and Bunn (2013) attribute to factors such as intermittent wind and strategic behaviour by dominant firms.…”

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confidence: 99%

Climate policy, interconnection and carbon leakage: The effect of unilateral UK policy on electricity and GHG emissions in Ireland

Curtis¹,

Cosmo²,

Deane³

2014

EEEP

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This paper examines the effect on Ireland's Single Electricity Market (SEM) of the UK's unilateral policy to implement a carbon price floor for electricity generation based on fossil-fuel. We simulate electricity markets and find that, subject to efficient use of the interconnectors between the two markets, a carbon price floor will lead to carbon leakage, with associated emissions in the Republic of Ireland increasing by 8% and SEM's electricity prices increasing by 2.4%. As the carbon price floor does not affect the number of ETS allowances no change is anticipated in aggregate European emissions. We also find that the EU's proposal to postpone ETS allowance auctions will reduce Irish emissions somewhat but that the trade opportunities associated with the UK carbon price floor means that emissions reductions in Ireland will be lower than might have been otherwise. A carbon price floor will result in substantial tax revenues and had the carbon price floor been implemented in Northern Ireland the larger share of taxes remitted would be paid by Republic of Ireland customers within the SEM. A carbon price floor in the Republic of Ireland is a potential policy option that would generate revenues in excess of €250 million but associated electricity prices increases in excess of 17% would have significant negative welfare and competitiveness effects. John Curtis is grateful for funding from the ESRI Energy Policy Research Centre, Valeria Di Cosmo to Science Foundation Ireland. Paul Deane is grateful of the support of the Environmental Protection Agency under 'TIMES Phase II' funding. We would like to thank John Fitzgerald, Brian O'Gallachoir and Laura Malaguzzi Valeri for helpful advice, participants at the ESRI seminar for comments and suggestions. The usual disclaimer applies.ESRI working papers represent un-refereed work-in-progress by researchers who are solely responsible for the content and any views expressed therein. Any comments on these papers will be welcome and should be sent to the author(s) by email. Papers may be downloaded for personal use only. Working Paper No. 458June 2013 2 Climate policy, interconnection and carbon leakage: the effect of unilateral UK policy on electricity and GHG emissions in Ireland IntroductionThe European Union's energy policy envisages open and competitive energy markets in electricity and gas, maintaining secure energy supplies at the lowest possible cost [CEC (2011)]. Efficient, integrated, and fluid energy markets in Europe are also integral to making the transition to a low-carbon economy [CEC (2012a)]. Among the actions being implemented to achieve these goals is the EU third energy package, which comprises regulations on access to electricity and gas networks and directives concerning common rules for the internal markets in gas and electricity. The mechanisms implementing these new internal energy markets are, for the most part, to be completed by 2014. But the European Commission fears that that deadline will not be met, as Member States are slow in adjusti...

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“…This SMP does not however reflect the electricity price paid by the consumer, thus necessitating additional costs including transmission, balancing and distribution costs, as well as a retail margin [6,7,10,43]. Prices for the RTP ET were calculated for the year 2013 based on previous RTP studies [7,47]. Data pertaining to real-time CO 2 (g/kWh), a byproduct of electricity generation, for the year 2013 in Ireland were provided by Eirgrid [48].…”

Section: Et and Co 2 Calculationsmentioning

confidence: 99%

A Decision Support Tool for Building Integrated Renewable Energy Microgrids Connected to a Smart Grid

2017

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Abstract:The objective of this study was to create a tool that will enable renewable energy microgrid (REµG) facility users to make informed decisions on the utilization of electrical power output from a building integrated REµG connected to a smart grid. A decision support tool for renewable energy microgrids (DSTREM) capable of predicting photovoltaic array and wind turbine power outputs was developed. The tool simulated users' daily electricity consumption costs, avoided CO 2 emissions and incurred monetary income relative to the usage of the building integrated REµG connected to the national electricity smart grid. DSTREM forecasted climate variables, which were used to predict REµG power output over a period of seven days. Control logic was used to prioritize supply of electricity to consumers from the renewable energy sources and the national smart grid. Across the evaluated REµG electricity supply options and during working days, electricity exported by the REµG to the national smart grid ranged from 0% to 61% of total daily generation. The results demonstrated that both monetary saving and CO 2 offsets can be substantially improved through the application of DSTREM to a REµG connected to a building.

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Irish and British electricity prices: what recent history implies for future prices

Cited by 17 publications

References 17 publications

Wind, Storage, Interconnection and the Cost of Electricity Generation

Wind, Storage, Interconnection and the Cost of Electricity Generation

Climate policy, interconnection and carbon leakage: The effect of unilateral UK policy on electricity and GHG emissions in Ireland

A Decision Support Tool for Building Integrated Renewable Energy Microgrids Connected to a Smart Grid

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