Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
A regulation upgrade for utilities
disruption?
New York– KAPSARC Workshop
Jean-Michel Glachant
Director “Florence School o...
NO!
From the
future!
If any…
1/ The EU context
What was it about?
Two decades to build kind of Market based power industry
“Unbundling” did cut the ind...
2/ Today&Future: 3 waves of disruption
What was it about?
• Wave of grid investment (said Euro “100bn” from 2015 to
2030) ...
3/ 3 waves of regulation disruption
What was it about?
• Wave of grid investment Incentive Regulation was to lower
OPEX; w...
4/ 3 waves of regulation upgrade
What was it about?
• Wave of grid investment EU energy regulators (CEER) & EU
Agency (ACE...
T&T experience for sharing data, assumptions & calculus
• Issue: almost black-out of the entire continental power system i...
T&T for coordinating allocation of grid with energy trade
• Issue: inefficient use of border capacity because of separate ...
Unbundling
7/ Emerging businesses:
Market Approaches
 Old issue: unbundling TSO stricter than DSO, especially for small D...
Scope of involvement (& third party access)
 General principles: pilots with R&D budget (IR, NL, Italy), included in
RAB ...
www.florence-school.eu
To conclude? A decade long regulatory upgrade debate
(efficient frame for investment wave) + (coher...
www.florence-school.eu 12
Thank you for your attention
Email contact: jean-michel.glachant@eui.eu
on Twitter: @JMGlachant ...
Upcoming SlideShare
Loading in …5
×

A regulation upgrade for utilities disruption?

369 views

Published on

New York - KAPSARC Workshop

  • Be the first to comment

  • Be the first to like this

A regulation upgrade for utilities disruption?

  1. 1. A regulation upgrade for utilities disruption? New York– KAPSARC Workshop Jean-Michel Glachant Director “Florence School of Regulation” @ European University Institute – Florence (Italy)
  2. 2. NO! From the future! If any…
  3. 3. 1/ The EU context What was it about? Two decades to build kind of Market based power industry “Unbundling” did cut the industry into two areas: • 1- The “market area” has: market incentives, open entry, competition watchdog • 2- The “monopoly area” has: incentive regulation, monopoly franchise, energy regulator Core of EU incentive regulation was within low demand growth - then incentive regulation targeted: *lowering costs of “grid & system” operation (OPEX) **linking “grid & system Op.” to wholesale market trade 3
  4. 4. 2/ Today&Future: 3 waves of disruption What was it about? • Wave of grid investment (said Euro “100bn” from 2015 to 2030) Continental scale internal market + EU common RES energy Policy (20% RES in year 2020) • Wave of system decentralization EU RES are local or individual & not “Utility RES Portfolio obligation” + many grids are unbundled (TSOs from DSOs; both grids from supply) • Wave of full “digitalization” smart grids, smart metering, big data + disruptive technologies storage, “market platforms”, “internet of things” 4
  5. 5. 3/ 3 waves of regulation disruption What was it about? • Wave of grid investment Incentive Regulation was to lower OPEX; with CAPEX being ROR > not framing efficient invest. • Wave of system decentralization TSOs are few & regulators did learn; DSOs are hundreds & very heterogeneous – Markets were designed for national / wholesale; not local or retail markets // new services + locally produced & valued • Wave of full “digitalization” + disruptive technologies 1/Designing right incentives for monopoly innovation into their “own system disruptions” is   ; 2/Reducing asymmetry of information & knowledge production “Regulator / Operators” via “pilots & experiments” is  , fuzzy & slow 5
  6. 6. 4/ 3 waves of regulation upgrade What was it about? • Wave of grid investment EU energy regulators (CEER) & EU Agency (ACER) + EU Commission are already working on an EU upgrade > will clarify a lot this year • Wave of system decentralization End(?) 2016 CEER & ACER will issue first comments or recommendations + Commission a proposal new Market & Grids legislation > will clarify more in 2017? Or only in 2018? • Wave of full “digitalization” + disruptive technologies Much more fuzzy??? Even not clear if it could be made by “Energy regulation & policy” and not from “Digital economy & society regulation & policy” 6
  7. 7. T&T experience for sharing data, assumptions & calculus • Issue: almost black-out of the entire continental power system in 2006 because grid operators made wrong assumptions about the state of neighboring systems when taking corrective actions • Remedy: Regional Network Security Coordination Initiatives (Coreso, PSCI) T&D relevance • Issue: if/when DSOs act as system operator to foresee & prepare for congestion in distribution grids • Remedy: DSOs join these Reg. centers data, assumptions, & calculation 5/ Decentralization: from T&T to T&D cooperation (1)
  8. 8. T&T for coordinating allocation of grid with energy trade • Issue: inefficient use of border capacity because of separate clearing of trade for (network capacity) and trade (energy markets) • Remedy: “coupling” of trade in adjacent energy markets with ex ante firm grid capacity offered to energy trade T&D coordinating allocation of grid with energy trade • Issue: if/when the T&D boundary would become a structural congested bottleneck in the energy system that requires separate energy prices • Remedy: DSOs build “T&D market coupling” algorithm 6/ Decentralization: from T&T to T&D cooperation (2)
  9. 9. Unbundling 7/ Emerging businesses: Market Approaches  Old issue: unbundling TSO stricter than DSO, especially for small DSOs (TSOs will run data-hub in Nordic countries; proposal in D)  New issue: DSOs unbundled from utilities entering into new business (e.g. Alliander statups and Eandis energy efficiency advice and coordination for municipalities) Market design Public service regulation  Is an issue for competition in the market, but let for competition for the market, e.g. city tendering for EC charging infrastructure and third party market facilitation  Electric vehicle charging infrastructure: issue of roaming (with contract of other supplier), and fuel station billing (without contract)  Storage: price regulation in the market or competition for the market in case of locational market power  Market facilitation: assigned to third party in UK (Data Communication Company) and Italy (Acquirente Unico)
  10. 10. Scope of involvement (& third party access)  General principles: pilots with R&D budget (IR, NL, Italy), included in RAB in motivated cases (UK, NL “proven long-term market failures”)  Storage: max 50/100 MW and auctioning of capacity not used by DSO (UK pilot); separate business (SE)  Electric vehicle charging: assets financed by DSO R&D budget, but separated from RAB to allow transition towards market (IR)  Market facilitation: providing data to data hub and validation of data (Italy), data hub operator (BE), smart meter without “after the meter device functionalities, like display” (IR, NL) 8/ Emerging businesses: Role for DSO
  11. 11. www.florence-school.eu To conclude? A decade long regulatory upgrade debate (efficient frame for investment wave) + (coherence for decentralized power systems) + (keeping doors, brains & wallets open to radical innovation)…
  12. 12. www.florence-school.eu 12 Thank you for your attention Email contact: jean-michel.glachant@eui.eu on Twitter: @JMGlachant already >15 000 tweets My web site: http://www.florence-school.eu

×