Identifying options for regulating the coordination of network investments with investments in distributed electricity generation

This paper analyses two effects of the current Dutch regulation on the system operators of the electricity network and on teh decentralised generators of electricity, and suggests a number of improvements in the tariff regulation. The increase in the distributed generation of electricity, with wind turbines and solar panels, necessitates investments in the distribution network. The current tariff regulation in the Dutch electricity industry, with its ex post evaluation of the efficiency of investments and the frontier shift in the x-factor, delays these investments. In the unbundled electricity industry, the investments in the network need to be coordinated with those in the distributed generation of electricity to enable the DSOs to build enough network capacity. The current Dutch regulations do not provide for a sufficient information exchange between the generators and the system operators to coordinate the investments. This paper analyses these two effects of the Dutch regulation, and suggests improvements to the regulation of the network connection and transportation tariffs to allow for sufficient network capacity and coordination between the investments in the network and in the generation of electricity. These improvements include locally differentiated tariffs that increase with an increasing concentration of distributed generators.

Боротьба з бідністю як орієнтир проєвропейської політики

Період європейського самоусвідомлення України триває вже досить довго. Парадоксально, але факт: за будь-яких змін зовнішньополітичної парадигми нашої держави європейська складова не лише не зникає, а й посилюється. Принаймні на теоретичному рівні. Не менш суттєвим, на наш погляд, є й те, що за будь-яких умов український “віртуальний” європеїзм зберігає соціальну аргументацію. До об’єднаної Європи ми прагнемо долучитися переважно задля досягнення заможнішого життя. Водночас на практичному рівні наші уявлення щодо ключових соціальних ознак реального європеїзму й досі лишаються досить розмитими, якщо не спотвореними. І досі у нас фахово не визначено статус ключових соціальних чинників у тих інтеграційних моделях, до яких так чи інакше схиляються різні політичні сили країни, а також місце цих чинників у ключових напрямках і механізмах співпраці з ЄС. Зокрема, це стосується проблеми бідності. Щоб наздогнати Європу за рівнем добробуту (і це вже не парадокс), потрібно спочатку наздогнати її за рівнем бідності. Євроінтеграційна реальність є такою, що соціальна прірва розділяє народи значно надійніше, аніж будь-яка “залізна заслона” чи Берлінський мур

Absence of a market in the Dutch balancing mechanism:European rules versus specific investments

The European directives for the electricity industry prescribe the creation of a market for balancing electricity supply and demand. In this paper, we demonstrate that a market for balancing has not emerged in the Dutch electricity industry, and that, instead, the balancing transactions are governed by regulated, long-term contracts and a bidding mechanism. We explain the absence of a balancing market by using the framework of transaction cost economics, in which the efficiency of a market decreases with increasing investments in specific assets. The results of a questionnaire among the energy firms that supply balancing power in the Dutch setting show that these firms have invested in specific physical, temporal and dedicated balancing assets. The need for these specific investments to balance supply and demand does not only explain the absence of a market, but also the lack of participation by small firms in the balancing mechanism. We recommend several policies, such as stimulating technological developments for the storage of electricity and demand side management, which reduce these specific investments in balancing assets, and thereby stimulate the creation of a market and the participation of small firms

Transitioning to sustainable energy by incumbent utilities: insights from M&As, alliances, and divestments

Energy utilities play an important role in transitioning to a sustainable energy industry. Data on 8967 transactions by 19 European energy utilities from 1990 to 2019 illustrate when and how utilities invest in sustainable resources and divest traditional resources such as fossil-fuel plants. Utilities transitioning to sustainable energy have greater financial resources and experience with sustainability, are publicly owned, and access sustainable resources of international and inter-industry partners. Utilities adopt a diversified strategy of balancing sustainable and traditional resources.<br/

Regulation, Governance and Adaptation: Governance transformations in the Dutch and French liberalizing electricity industries

For more than a decade, the European governments have focused their energy policies on creating one European competitive electricity market. Several regulations are introduced into the European electricity industries for this purpose: the energy firms have to unbundle the electricity networks from electricity generation and retail, and the consumers should be able to choose their electricity retailer. This thesis analyses which new governance structures emerged in the Dutch and French electricity industries as a result of these regulations for four types of electricity transactions: the network connection, network access, balancing and switching transactions. The parties in these electricity industries did not adopt a market, but hybrid forms of governance that remained extensively regulated. The efficiency of these new governance structures cannot be explained with the attributes of the transactions, as is proposed by transaction cost economics. This thesis therefore introduces the concept of adaptation into transaction cost economics. Adaptation is the adjustment by economic actors from one governance structure to another, and is characterized by three attributes: the identity of the future contracting party, the laterality of the adaption, and the type of response in the adaptation process. These attributes explain the governance transformations and the new governance structures in the two industries. Regulation continues to play a pervasive role in the liberalized electricity industries. It influences the attributes of the transactions, the new governance structures and the adaptation process