Explain The Past, Present And Future State Of The Electricity Market

This essay will detail the impact of EU liberalisation policy on the UK energy industry and relate this to a previous sample of a group of suppliers. This essay will discuss industry supplier concentration, oligopoly and monopolistic competition, the EU competition commission and potential single markets which are not yet subject to scrutiny by the competition commission.

The low price elasticity of demand for household energy given the lack of easy alternatives means that consumers will continue to purchase it even when prices rise drastically as we can see from extract A they did over the three year period. Furthermore the complex pricing structures in the energy market make it difficult for consumers to exercise any consumer sovereignty because they lack the information or indeed don’t know how to interpret it, to make a decision which is in their best interest.

The public interest theory of regulation, or economic theory of regulation states that industrial regulation is essential in maintaining a natural monopoly. Natural monopolies turning into a regular monopoly charging monopoly prices can be harmful to society. Something that everyone most generally uses or needs like public resources i.e. electricity and water. Almost every person in our society requires these resources. The initial cost for creating a firm that can provide these services is high. Some startup cost can include power stations as well as power lines, labor costs, the cost of producing the power, and many other costs. These naturally occurring costs can often bar entry or discourage entry into the industry. In the event that a firm does make it into the industry and starts producing these public resources such as

In 2007, Canada’s industries saved 2.1 billion U.S. dollars of energy costs (2007). All these numbers show Canada’s efforts in general public utilities.

My individual seminar paper is written on EDF Energy. This is one of UK’s largest energy companies and its large producer of low carbon electricity. They generate around one fifth of the UK’s electricity. They supply electricity and gas to around 5.5 million residential and business customers, making them the biggest supplier of electricity by volume.

First of all, every economic sector that was subject to economic regulation before 1975, has undergone significant changes in the nature and extent of regulation. These changes had profound effects on the structure of industries, price levels, costs and productivity. The industries in which changes occurred in economic regulations are the carriers, heavy transport, public transport, railways, telecommunications, production and transportation of natural gas, cable television, banking and financial services , electricity and property insurance and liability. These industries vary in structure, behavior, nature of regulation, and distribution of responsibilities between federal and state regulatory authorities. There are also wide variations in the major reasons, causes, and consequences of regulatory changes in these industries.

In this final assignment for Environmental Policy, Regulation, and Law, I will discuss the Energy Policy Act. This discussion will be geared toward the current usage of renewable energy with reference to the incentives created in the Energy Policy Act. The introduction into this topic will include a brief synopsis of the act’s history. Following the history of the Energy Policy Act, there will be a discussion and argument for the act and its present incentives for the use of renewable energy sources. In conclusion, the expected future of the Energy Policy Act and the closing argument for its regulation will be covered.

Included in the rationalization of economic management was the recommendation on the restructuring of the public sector monopoly businesses and granting third party access in network industries. After more than two decades of electricity sector reforms, the current state of electricity reform progress in Australia is marked by individual heterogeneity across different states.3 The natural monopoly segments remain economically regulated where the independent regulator sets network charges. However, network charges have experienced sharp increases, resultingin network costs constituting around40–50% of an average household’s electricity bill. This has largely been driven by increasing network and retail

For the major part of the previous century, the traditional school of thoughtconsidered power generation, transmission and distribution as a naturalmonopoly. Electricity was viewed as a national strategic asset and hence, bestprovided by a vertically integrated monopoly, usually owned and directlycontrolled by the state. Even in cases where the monopoly providers were privateplayers (as in the US), the state still maintained tight control through heavy-handedregulatory policies and measures

According to the case study written by Jurek, Bras, Guldberg, D’Arcy, Oh, and Biller, energy costs were steadily rising and were predicted to continue this trend going into the future. At the same time, utility companies were beginning to implement Smart Grid technologies to increase the efficiency of energy distribution. One resulting program to emerge from

In Katrin Jordan-Korte’s book she compares strategies of implementation of renewable energy markets and technologies to find what is the most effective strategy. Through her research she attempted to answer what specific renewable energy techniques were the most effect and efficient while also trying to find whether or not stricter or more lenient government decisions lead to a more successful energy promotion. One conclusion Katrin finds is that, “Government promotion is important and is warranted to secure a sufficient diffusion of renewable energy sources,” (219). The reason she believes government promotion is necessary is because without there being enforced policies on the use of renewable energy then because of the difference in cost power generation companies would shy away from using renewable energy technologies. The two best options of government implementation of renewable energy usage are either through taxation on nonrenewable energy sources, or through rewarding power generation companies for using renewable energy sources. The benefits of taxation are the relatively immediate and obvious decision a power generation company would have to make of having to begin using renewable energy sources in order to save on the newly created high costs of fossil fuels. This technique has been used in Germany which did lead to an initial spike in the diffusion of renewable energy. The issue that Katrin believes will come with any government who uses this method is that for

The Renewable Energy Act details the duties of the government and businesses in the development and utilization of renewable energy. It includes measures relating to mandatory grid connection, differentiated pricing, price management regulation, and tax reliefs (Zhou, 2008). The Energy Conservation Law strengthens energy conservation and promotes the advancement of energy conservation technology. The country’s most recently passed climate change law, the Five‐Year Plan for National Economic and Social Development, promotes environmentally sustainable economic growth, and lays out the national framework for a resource- efficient economy, rather than an economy that is resource-intensive (Zhou, 2008).

The topic chosen for this discussion is the micro economic especially Australian Energy Industry. It is acknowledged that this industry needs urgent policy reformation in regards to climate and energy. To achieve the reformation, four areas have been earmarked: supply reliability, price control and adequate demand and fixing COAG Energy Council (Pears 2017).

This question derives its relevance from three aspects. First, the academic literature has generally focussed on the appropriate regulatory design for specific markets, for instance in relation to the liberalization of European energy markets or the stability of financial markets. As also noted by Diaz-Rainey et al. (2011), little research has been done regarding cross-market effects of financial regulation on energy markets. Now that the line between the traditional financial and energy markets has become blurred, the link between the two deserves more attention. Second, it may prove useful not just to point out which aspects of energy trading may come under financial regulation, but to take the analysis one step further and examine how participants in the energy markets are likely to react to the incentives this new legislation offers them. The success of regulation hinges on how market participants adapt their behaviour to it, not just the substance of the legislation itself. Third, to the extent that these proposals are motivated by electoral calls for a strong response to financial instability and

This encouraged the formation of stand-alone power producers able to borrow large sums on the basis of the long-term power purchase agreements they had entered into with electric utilities. Since these projects do not directly involve a government or a government agency, they are somewhat beyond the scope of this article. So are projects in Australia, which have primarily been in extractive industries rather than in infrastructure.