Smart grids : Another step towards competition, energy security and climate change objectives

International audienceThe deployment of smart grids in electricity systems has given rise to much interdisciplinary research. The new technology is seen as an additional instrument available to States to achieve targets for promoting competition, increasing the safety of electricity systems and combating climate change. But the boom in smart grids also raises many economic questions. Public policies will need to be adapted, firstly to make allowance for the potential gains from smart grids and the associated information flow, and secondly to regulate the new networks and act as an incentive for investors. The new competitive offerings and end-user pricing systems will contribute to improving allocative and productive efficiency, while minimizing the risks of market power. With real-time data on output and consumption, generators and consumers will be able to adapt to market conditions. Lastly smart grids will boost the development of renewable energy sources and new technologies, by assisting their integration and optimal use

A surplus and welfare analysis of asymmetric regulation

Some European regulators have decided to force competition in their nationalmarkets. They have decided to go beyond the second directive and apply asymmetric regulation. Gas release programs and market shares constraints are the two asymmetric decisions imposed to incumbents. When a regulator imposes a gas release program to an incumbent, this operator is compelled to release quantities of its long term contracts to its competitor. In this paper, we will focus on gas release and its impact on welfare, consumer surplus and on the level of released quantities set by regulators. The aim of a gas release program is to give access to natural gas to competitors. They become actives on the market and are in competition with the incumbent. These programs are time limited. They only help competitors in expecting the development of hubs or new investments in importation infrastructures. If competitors want to stay active after the program, they may find others supply sources to increase security of supply. The gas release can induce Raising Rival's Costs or "Self-Sabotage" strategies. We use a Cournot model with capacity constraints to answer two questions. First, we will study the impact of these strategies on consumer surplus and welfare. We will show that there are no impact on consumer surplus but the welfare decreases. The gas release program introduces a transfer of profit between competitor and incumbent, reduces welfare because of the increase in costs of supply, but has no impact on total consumed quantities. Then, we will suppose that the regulator is setting released quantities maximising welfare. Gas release price is often based on costs plus a bid or a fixed premium. Quantities are set with a less obvious process. We will demonstrate that the regulator must set released quantities :- that would not be so high if incumbent's supplies are small to avoid Self- Sabotage or RRC strategies ;- as a function of incumbent's supplies if they are in intermediate values to avoid strategies seen above and to optimise quantities sold on the market ;- at a sufficient level to let the two operators playing their Cournot best reply function. Finally, we will conclude that the regulator can avoid RRC or Self-Sabotage strategies in maximising the welfare when it decides gas released quantities. Gathering from empirical studies, these quantities should not be so high in order to let a significant difference between the capacities of both competitor and incumbent to avoid collusive behaviours.Energy market ; Gas release ; Regulation ; Optimal released quantities ; Efficiency ; Welfare

The impact of asymmetric regulation on surplus and welfare : the case of gas release programmes

Some European regulators have decided to force competition in their nationalmarkets. They have decided to go beyond the second directive and apply asymmetric regulation. Gas release programs and market shares constraints are the two asymmetric decisions imposed to incumbents. When a regulator imposes a gas release program to an incumbent, this operator is compelled to release quantities of its long term contracts to its competitor. In this paper, we will focus on gas release and its impact on welfare, consumer surplus and on the level of released quantities set by regulators. The aim of a gas release program is to give access to natural gas to competitors. They become actives on the market and are in competition with the incumbent. These programs are time limited. They only help competitors in expecting the development of hubs or new investments in importation infrastructures. If competitors want to stay active after the program, they may find others supply sources to increase security of supply. The gas release can induce Raising Rival's Costs or “Self-Sabotage” strategies. We use a Cournot model with capacity constraints to answer two questions. First, we will study the impact of these strategies on consumer surplus and welfare. We will show that there are no impact on consumer surplus but the welfare decreases. The gas release program introduces a transfer of profit between competitor and incumbent, reduces welfare because of the increase in costs of supply, but has no impact on total consumed quantities. Then, we will suppose that the regulator is setting released quantities maximising welfare. Gas release price is often based on costs plus a bid or a fixed premium. Quantities are set with a less obvious process. We will demonstrate that the regulator must set released quantities : - that would not be so high if incumbent's supplies are small to avoid Self- Sabotage or RRC strategies; - as a function of incumbent's supplies if they are in intermediate values to avoid strategies seen above and to optimise quantities sold on the market; - at a sufficient level to let the two operators playing their Cournot best reply function. Finally, we will conclude that the regulator can avoid RRC or Self-Sabotage strategies in maximising the welfare when it decides gas released quantities. Gathering from empirical studies, these quantities should not be so high in order to let a significant difference between the capacities of both competitor and incumbent to avoid collusive behaviours.REGULATION ; MARCHE INTERIEUR ; GAZ NATUREL ; MARCHE CONCURRENTIEL ; GAS RELEASE

Les réseaux intelligents : régulation, investissement et gestion de la demande électrique

Le développement des réseaux intelligents (smart grids en anglais, ou encore SG) dans les systèmes électriques fait aujourd'hui l'objet de nombreuses recherches pluridisciplinaires. Cette nouvelle technologie est vue comme un outil supplémentaire que les Etats pourraient mobiliser pour atteindre les objectifs de concurrence, de sécurité des systèmes électriques et de lutte contre le changement climatique, objectifs fixés nationalement ou au niveau européen. L'essor de ces nouveaux réseaux fait émerger conjointement de nombreuses questions économiques. En effet, compte tenu des gains potentiels liés aux smart grids pour les acteurs de la chaîne électrique ainsi que des flux informationnels qu'ils vont générer, les systèmes de régulation devront être adaptés à la fois pour réguler ces nouveaux réseaux mais aussi pour inciter aux investissements. Les nouvelles offres et tarifications à l'usager final qu'ils permettront devront aller dans le sens d'une concurrence accrue et donc d'une recherche des efficiences allocative et productive, minimisant les risques de pouvoir de marché. Les producteurs et consommateurs, grâce à ces flux informationnels sur les productions ou consommations en temps réel pourront s'adapter aux conditions du marché. Enfin, les énergies renouvelables et les nouvelles technologies comme le stockage ou les véhicules électriques trouveront dans le développement de ces réseaux intelligents un soutien à leur insertion et utilisation optimale. Ces questions donnent toutes des pistes de réflexions et de recherche pour lesquelles la théorie économique peut être mobilisée ; certaines font d'ailleurs déjà l'objet de premiers résultats.Smart grid ; Régulation ; Investissements ; Demand Side Management ; Energies renouvelables ; Véhicule électrique.

Demand side management in an integrated electricity market: what are the impacts on generation and environmental concerns ?

International audienceSmart Grid technology appears necessary to succeed in activating the demand through demand side management (DSM) programs. This would in turn improve energy efficiency and achieve environmental targets through controlled consumption. The many pilot projects led worldwide involving smart grids technology, brought quantitative evaluations of DSM measures on electricity load. Efficient DSM instruments must be fine tuned to respond to very specific issues arising from the generation mix, the integration of intermittent energies or the level of outage risks faced during peak period. Efficient DSM strategies are illustrated through a model involving five countries that carry these different features and under the assumptions of isolated and fully interconnected markets. This paper aims at bringing recommendations regarding the instruments that should be implemented to maximize the benefits of smart grids technology and demand response. Finally, it tends to emphasis the issue of homogenized energy efficiency policies, critical in the building of internal energy markets such as the one the European Union is envisioning

An analytical approach for elasticity of demand activation with demand response mechanisms

The aim of this work is to demonstrate analytically under what conditions activating elasticity of demand of consumers could be beneficial for the social welfare. It has added to the literature on analyzing the use of price signals in eliciting demand response by an analytical approach. We develop so an analytical Nash model to quantify the effect of implementing demand response, via price signals, on social welfare and energy exchanges. A prior results show that the trade-off between producing locally and exporting energy depends on the opportunity cost of the energy and the global efficiency of the generation technology. Results are moreover impacted by the degree of integration between the countries. The novelty of this research is the demonstration of the existence of an optimal region of price signal for which demand response leads to increase the social welfare. This optimality region is negatively correlated to the degree of competitiveness of the generation technologies and to the market size of the system. We particularly notice that the value of un-served energy or energy reduction the producers could lose from such demand response program would limit the effectiveness of its implementation. This constraint is strengthened when energy exchanges between countries are limited. Finally, we demonstrate that when we only consider the impact in term of consumers' surplus, more aggressive DR could be adopted. The intensity of DR program is however negatively correlated to the degree of the elasticity of demand

L'intégration des énergies renouvelables : le débat est aussi économique

La communauté des ingénieurs est depuis de nombreuses années mobilisée sur la problématique de l'insertion des sources d'énergie renouvelables dans le système électrique du fait de leur caractère décentralisé et/ou intermittent mais l'apparition des économistes dans ce champ de recherche est plus récente. La question des coûts est restée un peu secondaire tant que la contribution des sources d'énergie renouvelables était modeste. Avec la fixation d'objectifs de production de plus en plus ambitieux, et des perspectives d'augmentation des coûts des politiques de soutien, de renforcement des réseaux ou d'équilibrage, la vision économique prend de l'importance, d'autant qu'elle intervient dans un contexte de libéralisation des marchés de l'électricité.production intermittente ; production décentralisée ; énergies renouvelables ; système électrique

Sécurité énergétique de l'Union européenne : les enjeux de la libéralisation dans un environnement international risqué.

Le processus européen de libéralisation et d'intégration des différents marchés européens en un marché unique poursuit son développement. Cependant, le contexte énergétique de l'Europe dans lequel intervient cette ouverture des marchés de l'énergie se modifie. Aussi, la question de la sécurité énergétique des états membres est au cœur de divers débats. Cette sécurité atteint non seulement le secteur gazier, où les contrats et les relations avec les fournisseurs ont été construites pour assurer une certaine sécurité, mais se répercute aujourd'hui également sur le marché électrique de part la part croissante du gaz comme input dans la production électrique. Les deux secteurs sont donc confrontés à des problèmes de sécurité (investissements dans les moyens de pointe, les infrastructures de transport, la diversification, signature de contrats de termes différents, ...) qu'il faut gérer au mieux pour assurer la fourniture de biens qui apparaissent comme des biens nécessaires socialement et économiquement. Dans cet article, nous nous proposons d'étudier le problème de la sécurité énergétique de l'Europe dans un univers changeant et dont les risques se modifient.SECURITE ENERGETIQUE ; RISQUE ; INVESTISSEMENT ; SECURITE D'APPROVISIONNEMENT ; UNION EUROPEENNE

Optimal household energy management and participation in ancillary services with PV production

The work presented in this paper deals with a project aiming to increase the value of photovoltaic (PV) solar production for residential application. To contribute to the development of the new functionalities for such system and the efficient control system to optimize its operation, this paper defines the possibility for the proposed system to participate to the ancillary services, particularly in active power service provider. This service of PV-based system for housing application, as it does not exist today, has led to a market design proposition in the distribution system. The mathematical model for calculating the optimal operation of system (sources, load, and the exchange power with the grid) results in a linear mix integer optimization problem where the objective is to maximize the profit obtained by participating to electricity market. The approach is illustrated in an example study case. The PV producer could benefit from its intervention on balancing market or ancillary services market despite of the impact on the profit of several kinds of uncertainty, as the intermittence of PV source.energy management ; ancillary services ; PV production ; household application