Jevan smith-project
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Jevan smith-project Presentation Transcript

  • 1. The Energy MarketBy Jevan Smith
  • 2. Energy Market StructureCompetitive Energy MarketDeregulation vs. RegulationGovernment RegulationThe price of energyIncentives in the energy marketConclusionIntroduction
  • 3. Before the 1990’s utilities controlled the entireelectricity market, they had what is called a verticallyintegrated monopoly…Vertically-integrated monopoly: Is when a companyexpands its business into areas that are at differentpoints on the same production path, such as when amanufacturer owns its supplier and/or distributor.In a regulated electricity market a single company isnormally referred to as a utilityEnergy Market Structure
  • 4. Deregulated states allow a complete retailcompetition model for energyImproves efficiencyCompetition drives energy prices lower and lowerInnovations are madeCompetitive Energy Market
  • 5. Deregulation vs. RegulationRegulated electricity market: “a single company, normallyreferred to as a utility, owns all the infrastructure – thephysical stuff that stores and distributes electricity, liketransformers, poles, and wires….”Deregulated electricity market: “while the utility still ownsall the infrastructure and is still responsible for distributingelectricity to your home, competing electricity providersare allowed to buy the electricity and sell it to youdirectly….”
  • 6. Market failure: A situation where free markets fail toallocate resources efficiently.Negative externalities: consumers and or producersfail to take into account the effects of their actions ona third partyInequality: The gap between rich and poorGovernment Regulations
  • 7. The price of energySupply and demand impact the price of energy as wellas government regulations, these in particular shapethe price of energyAs an example, a power plant is destroyed by a earthquake causing the price of energy to rise
  • 8. Incentives: is something that motivates someone toperform an action.For example, pollution permits are incentives forfirms or individuals not to pollute.Incentives to use less powerIncentives in the energy market
  • 9. We have discovered that the energy market is full ofrelevant information in relation to the microeconomicsubject. We coveredincentives, monopolies, governmentregulations, competition and much more…Thank you for your time and attentionConclusion
  • 10. http://www.economicsonline.co.uk/Market_failures/Types_of_market_failure.htmlhttp://www.sparkenergy.com/blog/demystifying-deregulation/http://en.wikipedia.org/wiki/Incentivehttp://www.economicshelp.org/marketfailure/pollution-permits.htmlhttp://www.minneapolisfed.org/community_education/student/essay/topics/topic09.cfm?http://www.rwe.com/web/cms/en/403722/rwe/press-news/specials/energy-trading/how-the-electricity-price-is-determined/http://www.economicsonline.co.uk/Market_failures/Types_of_market_failure.htmlhttp://www.constellation.com/about-constellation/pages/competitive-energy-markets.aspxSources