Presentation on theme: "Master-Thesis Economics, JKU"— Presentation transcript:
1 Master-Thesis Economics, JKU "Electrical Grid Regulatory Effectiveness with Regards to Electricity Reliability in the EU“Master-Thesis Economics, JKUStefan SchmidingerSupervising tutor:Prof. Christine ZulehnerEnergieinstitut an der JKULinz, 6.Nov.2012
2 Introduction: Liberalization of Energy Markets First Directive 96/92/EG of the European ParliamentAmendment 2003Directive 2003/54/EG of the European ParliamentGrid access to third partiesRegulation about grid tariffsUnbundlingMotivation was/is the establishment of competition and prevention/neutralization of natural monopolies
3 Motivation Lots of theoretical evaluation about types of regulation Almost no empirical evaluationAnna Ter-Martirosyan, Oct. 2003, The Effects of Incentive Regulation on Quality of Service in electricity Markets, working paper
4 Determination of Regulations No Regulation at all.Rate of Return Regulations: costs (not just the costs which cannot be controlled by the system operator) are totally refunded plus some premium.Costs * (1 + i)Incentive Regulations: Price Cap Regulations which do not provide incentives to invest in the quality (in terms of outage avoidance or minimizing outage duration) of the grid. But provide an incentive to reduce costs.1 + CPI – xRegulations which also provide an incentive to improve performance.1 + CPI – x – qi = allowed profit (e.g. weighted average cost of capital); x = efficiency factor ;q = quality penalty
5 Determination of Regulations Austria9091929394959697989900010203040506070809101112No Regulation1RoRIncentive RegulationQuality StandardsSource: National Reports European Energy Regulators &Frontier-Economics IWET Report 2011
6 Hypothesis:Is there a casual influence of the kind of regulation on the quality/performance of the electrical grid due to different incentives for the system operators?Rate of Return Regulation leads to lower grid outages.Evaluation of regulatory effectiveness!
7 Dependant Variable Dependant Variable: Minutes lost per year and capita ( ) excluding exceptional events [MinLost]Unbalanced Panel:19 countries12 years
11 Explanatory Variable Variablenname Range Einheit Quelle MIN MAX energy_import_dependence1binärNational Reports CEERlatitude_capital90Grad; SekundenGDP_Capita_t70Euro je EinwohnerEurostatpop_density500inhabitants/km²el_price_industrie_cent15cent/kWhel_price_domestic_consumer_cent21hgt_t7kKdEntry_Regulation6oecdPublic_ownershipVertical_integratioonenergy_intensity_to/euro20to Rohöleinheit pro 1000 Euroel_consumption_capita_mwh10mWhWind_Photo35%Zentralwirtschaftstrong_wind_days269ECA&D projectprecipitation_days_R10mm78Tageconsecutive_dry_days203cold-spell-duration88warm-spell-duration104snow-days_5cm216Zeit11Jahre
14 First Conclusion90% proof that Rate of Return leads to less outage than incentive regulation (even with quality standards)In order to evaluate effectiveness of regulation grid tariffs would be necessary. (Which are not!)
15 Danke für Ihr Interesse! Kontakt: Stefan SchmidingerEnergieinstitut an der Johannes Kepler Universität LinzAltenberger Straße 694040 LinzAUSTRIATel:Fax:15
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