The economic impact of electricity conservation policies: A case study of Ireland

As electricity is an essential input in almost every production process, it is essential to quantify the impact of economic policies aimed at electricity conservation on the output. This research investigates the e®ect of unanticipated shocks in electricity consumption, technical e±ciency, and electricity price on the value added in the heterogenous service and industrial sectors, under a demand side model. Ireland is utilized as a case study as it is pursuing ambitious electricity conservation targets while in the midst of a severe economic recession. Given the important role of electricity as an input in both the services and industrial sectors, it was feared that these energy conservation targets may adversely impact on these sectors and as a result worsen the national economic situation. Findings show that value added, electricity consumption, electricity price and technical e±ciency are co-integrated for both the service and industrial sectors. However, impulse response functions show that positive technical e±ciency and consumption shocks have persistent negative e®ects on the value added of both sectors. Therefore, a direct electricity conservation policy, that puts a constraint on electricity consumption, should not have an adverse e®ect on sector speci¯c value added.Electricity consumption, Value added, Granger Causality, Impulse response

The impact of electricity storage on wholesale electricity prices

This paper analyzes the impact of electricity storage on the production cost of a power system and the marginal cost of electricity (electricity price) using a unit commitment model. Also real world data has been analyzed to verify the e®ect of storage operation on the electricity price using econometric techniques. The unit commitment model found that the deployment of a storage system reduces the fuel cost of the power system but increases the average electricity price through its e®ect on the power system operation. However, the reduction in the production cost was found to be less than the increase in the consumer's cost of electricity resulting in a net increase in costs due to storage. Di®erent storage and CO2 price scenarios were investigated to study the sensitivity of these results. The regression analysis supports the unit commitment results and ¯nds that the presence of storage increases average wholesale electricity prices for the case study system.Electricity storage; Electricity price; Production cost

Electricity Prices and Generator Behaviour in Gross Pool Electricity Markets

Electricity market liberalisation has become common practice internationally. The justification for this process has been to enhance competition in a market traditionally characterised by statutory monopolies in an attempt to reduce costs to end-users. This paper endeavours to see whether a pool market achieves this goal of increasing competition and reducing electricity prices. Here the electricity market is set up as a sealed bid second price auction. Theory predicts that such markets should result with firms bidding their marginal cost, thereby resulting in an efficient outcome and lower costs to consumers. The Irish electricity system with a gross pool market experiences among the highest electricity prices in Europe. Thus, we analyse the Irish pool system econometrically in order to test if the high electricity prices seen there are due to participants bidding outside of market rules or out of line with theory. Results indicate that the Irish pool system appears to be working efficiently and that generators are bidding their true marginal costs. Thus, the pool element of the market structure does not explain the high electricity prices experienced in Ireland.Electricity Markets; Auction Theory; Multiple Regression Analysis

Base-load cycling on a system with significant wind penetration

Certain developments in the electricity sector may result in suboptimal operation of base-load generating units in countries worldwide. Despite the fact they were not designed to operate in a flexible manner, increasing penetration of variable power sources coupled with the deregulation of the electricity sector could lead to these base-load units being shut down or operated at part-load levels more often. This cycling operation would have onerous effects on the components of these units and potentially lead to increased outages and significant costs. This paper shows the serious impact increasing levels of wind power will have on the operation of base-load units. Those base-load units which are not large contributors of primary reserve to the system and have relatively shorter start-up times were found to be the most impacted as wind penetration increases. A sensitivity analysis shows the presence of storage or interconnection on a power system actually exacerbates base-load cycling until very high levels of wind power are reached. Finally, it is shown that if the total cycling costs of the individual base-load units are taken into consideration in the scheduling model, subsequent cycling operation can be reduced.Thermal Power Generation; Wind Power Generation; Pumped Storage Power Generation; Interconnected Power Systems; Power System Modeling; Costs

Unit commitment for systems with significant wind penetration

The stochastic nature of wind alters the unit commitment and dispatch problem. By accounting for this uncertainty when scheduling the system, more robust schedules are produced, which should, on average, reduce expected costs. In this paper, the effects of stochastic wind and load on the unit commitment and dispatch of power systems with high levels of wind power are examined. By comparing the costs, planned operation and performance of the schedules produced, it is shown that stochastic optimization results in less costly, of the order of 0.25%, and better performing schedules than deterministic optimization. The impact of planning the system more frequently to account for updated wind and load forecasts is then examined. More frequent planning means more up to date forecasts are used, which reduces the need for reserve and increases performance of the schedules. It is shown that mid merit and peaking units and the interconnection are the most affected parts of the system where uncertainty of wind is concernedpower generation dispatch; power system economics; stochastic systems; wind power generation

Harnessing citizen investment in community-based energy initiatives : A discrete choice experiment across ten European countries

Acknowledgements This work was supported by the European Union's Horizon 2020 research and innovation programme [grant agreement No. 837758] via the SocialRES project. The sole responsibility for the content of this study lies with the authors. It does not necessarily reflect the opinion of the European Union. We acknowledge the assistance from Lake Constance Foundation in Germany, Energética in Spain, I-ENER in France, REGEA in Croatia, Goparity in Portugal, and Abundance in the UK. This work was presented at the BEHAVE conference in April 2021, the IEA conference in May 2021, and the IAEE conference in June 2021, and we are thankful for the comments from these conferences which helps us to refine this study.Peer reviewedPublisher PD

Electricity Prices and Generator Behaviour in Gross Pool Electricity Markets

Electricity market liberalisation has become common practice internationally. The justification for this process has been to enhance competition in a market traditionally characterised by statutory monopolies in an attempt to reduce costs to end-users. This paper endeavours to see whether a pool market achieves this goal of increasing competition and reducing electricity prices. Here the electricity market is set up as a sealed bid second price auction. Theory predicts that such markets should result with firms bidding their marginal cost, thereby resulting in an efficient outcome and lower costs to consumers. The Irish electricity system with a gross pool market experiences among the highest electricity prices in Europe. Thus, we analyse the Irish pool system econometrically in order to test if the high electricity prices seen there are due to participants bidding outside of market rules or out of line with theory. Results indicate that the Irish pool system appears to be working efficiently and that generators are bidding their true marginal costs. Thus, the pool element of the market structure does not explain the high electricity prices experienced in Ireland

The impact of electricity storage on wholesale electricity prices

This paper analyzes the impact of electricity storage on the production cost of a power system and the marginal cost of electricity (electricity price) using a unit commitment model. Also real world data has been analyzed to verify the e®ect of storage operation on the electricity price using econometric techniques. The unit commitment model found that the deployment of a storage system reduces the fuel cost of the power system but increases the average electricity price through its e®ect on the power system operation. However, the reduction in the production cost was found to be less than the increase in the consumer's cost of electricity resulting in a net increase in costs due to storage. Di®erent storage and CO2 price scenarios were investigated to study the sensitivity of these results. The regression analysis supports the unit commitment results and ¯nds that the presence of storage increases average wholesale electricity prices for the case study system

The economic impact of electricity conservation policies: A case study of Ireland

As electricity is an essential input in almost every production process, it is essential to quantify the impact of economic policies aimed at electricity conservation on the output. This research investigates the e®ect of unanticipated shocks in electricity consumption, technical e±ciency, and electricity price on the value added in the heterogenous service and industrial sectors, under a demand side model. Ireland is utilized as a case study as it is pursuing ambitious electricity conservation targets while in the midst of a severe economic recession. Given the important role of electricity as an input in both the services and industrial sectors, it was feared that these energy conservation targets may adversely impact on these sectors and as a result worsen the national economic situation. Findings show that value added, electricity consumption, electricity price and technical e±ciency are co-integrated for both the service and industrial sectors. However, impulse response functions show that positive technical e±ciency and consumption shocks have persistent negative e®ects on the value added of both sectors. Therefore, a direct electricity conservation policy, that puts a constraint on electricity consumption, should not have an adverse e®ect on sector speci¯c value added

The Merit Order Effect of Wind Generation on the Irish Electricity Market

This paper considers the cost savings arising from wind generation through the merit order effect in gross pool electricity markets, using the Irish electricity market as a case study. The Irish electricity market makes for a good testing ground due to the fact that it is a single market with very little interconnection to other markets, allowing impacts of wind to be more clearly identified than on a more interconnected system. Ireland also has extremely ambitious renewable energy targets, resulting in a high penetration of wind generation. The authors estimate the historic cost savings arising from wind generation in the Irish electricity marketusing an hourly time series OLS regression model for 2009. We find that the value of wind to the market dispatch has resulted in savings of €141 million to the market dispatch. We find that the total costs to the market would have been in the region of 12% higher over the course of the year had no wind output been available. These savings are significantly greater than the subsidy received for wind-generated electricity over this time period, and as a result it can be seen that the positive externalities derived from wind generated electricity outweigh the cost of the subsidy; particularly when one considers the CO2 saving to the market and accepts that all forms of generation impose integration costs to electricity systems