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Electricity network regulation in a changing energy sector: 'The help of economics?!'
- 1. Electricity network regulation in a changing energy sector – the help of economics Graduation thesis Stefan Suurmond 3 April 2009
- 2. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
- 4. Example: Cake-cutting Why it is impossible to implement the ‘perfect’ method ? 1 Unintended/unexpected results Basic lesson: Do not ignore the complexity to implement your ‘perfect’ method Cakes are different and heterogeneous 1 Always some spillovers 1 2 Actors are different 3
- 5. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
- 6. Introduction I The electricity value chain The network operators have a legal monopoly in a specific region Distribution networks Network operators
- 8. Introduction The network tariffs are contested The maximum of the network tariffs are determined by a regulator. Too ‘high’ tariffs results in excess profits, but too ‘low’ tariffs in less investments 1 Recently, discussions are initiated about the current methods to determine the tariffs 2 Main point of discussion is whether the regulation of investments is sustainable in the long run. 3
- 10. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
- 14. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
- 16. Current regulations YC is only effective model if the world is in a stable period of network development YC is not effective if Companies are not comparable Not all societal benefits can be measured in a performance indicator The network operator can’t find the optimal investment level individually Historic and future cost level are very different 1 2 3 4 Under the model of YC it is not possible to take the future developments into account
- 17. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
- 18. Future regulations Different networks in different regions 1 Always some spillovers 1 2 Actors are different 3 In the future investment regulation will be more difficult 1 Unintended/unexpected results Economische Zaken
- 20. Future regulations The role of the regulator The research shows four possible roles Two examples: 1 The regulator should help to assess the real value to society of the investment level 2 The regulator should act as a platform to discuss the desirability of the future investment level
- 21. Content 1 Example 2 Introduction 3 Future developments 4 Current regulations 6 Conclusions 5 Future regulations
Editor's Notes
- Welcome to my presentation. In the next 20 minutes I will tell you everything about my graduation project that I did for Enexis and is the final step of my master program here at the TU Delft. As you can see of this title slide, you will probably guess that it has something to do with electricity networks, the energy sector, regulation and economics. I have studied on these terms in the past months, and translated my thoughts into a thesis of more than 100 pages. I have no the task to tell you all this in 20 minutes, and hope that you will understand these terms a bit more.
- This is of course not completely possible, that is why I will start with an example, To make it more easy for you, to grasp a bit more of the struggles that I had, I will give you first an example…. Of which is very simple but is a good methaphor for my work. After that I will give an introduction to my research and pose the research questions. I will tell you that a number of future developments are not taken into account and that we need a new approach to regulate electricity networks. <number>
- At first sight this is a nice answer yes, well while I was doing my research I found out that the application of these instruments and formal methods in practise always results in chaos. Than I wondered why, why is cake cutting always results in chaos. That is because once you have found such formula, and you think it is perfect you will start to act on the automatic pilot. If I trusted my method I would probably be able to walk away and come back over an hour and hope that you have managed. Well, I think I walked away, or stayed very passive during the process of cutting it would result in chaos. The art of cake-cutting requires great care and skill to ensure no party is left feeling cheated or envious. Now, however, parents and party hosts can approach the task with a little more confidence - mathematicians claim to have found the perfect way to cut a cake and keep everyone happy.Traditional methods, such as the \"you cut, I choose\" method, where one person halves the cake and the other chooses a piece, are flawed because though both get equal shares and neither is envious, the division is not equitable - one piece may have more icing or fruit on it than another, for example.This \"you cut, I choose\" method, known since time immemorialFor example, suppose one half of the cake is frosted with vanilla icing and the other with chocolate icing, and suppose Alice values chocolate icing twice as much as vanilla. It is possible that Alice's valuation of the piece she gets will be less than Bob's valuation of his piece, making these the two valuations inequitable.<number>
- one piece may have more icing or fruit on it than another, which will make people angry, and maybe you picked a piece but while cutting it turned out that the cake bleeded4
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- Transmission is above ground, distribution networks to connect households etc. Verschillen tussen netwerkbeheerders, Aantal klanten. UTRECHT GEEL MAKEN!!!!!!!!!!!!!!!!!6
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- Iets over research methode
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- Link tussen technologie en impact op het netwerk -> elke technologie heeft een eigen impact<number>
- One possible configuration -> I have analysed a number of scenarios for future configuration and all state that a two directional flow is needed, however to enable such flow the networks require more capacity and other components.
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