Jacqueline Boucher

Alternative Models of Restructured Electricity Systems, Part 1: No Market Power

Different equilibrium concepts have been proposed by various authors (Schweppe et al., Hogan et al., Chao and Peck, Wu et al.) to analyse competitive electricity systems. We establish correspondences between these different models through a single framework and provide additional interpretations of these equilibrium concepts. This unifying conceptual view also provides a computationally feasible approach to simulate the market. It also opens the way to the modeling of some imperfect markets.

Towards a common European Electricity market paths in the right direction… still far from an effective design

This paper analyses the future organization of cross border trade in the European electricity market. The draft Regulation “on Conditions for Access to the Network for Cross-Border Exchanges in Electricity” issued in March 2001 by the European Commission together with related documents produced by the European association of Transmission System Operators (ETSO) and the Council of European Electricity Regulators (CEER) until that date constitute the backbone of this analysis. The paper examines whether the economic principles contained in these documents suffice to design a working European electricity market and if not, what is missing. It concludes that these principles need to be completed by harder measures in order to induce the “real integrated single market” of electricity claimed by the Commission. In short, the principles may be necessary, but they are unlikely to be sufficient.

Economic forces in the European gas market -- a 1985 prospective

Abstract Future gas supply and demand patterns of the European Community are simulated using a gas trade model (GTM). This study is intended to provide an economic background for exploring the future policies of the main suppliers of the Community, the type of price movements that can be expected and the possible role of high cost gas. Simulations are provided for both short-term (1985–1990) and long-term (1995–2000) developments. A decrease in Dutch gas prices, Algerias price concession and abandonment of high prices for Norwegian gas are the main trends arising from the analysis. They all materialized between 1985 and the first half of 1986.

Gas trade in the European community during the 1970s: A model analysis

Abstract The European gas market has the reputation of being ruled by secrecy and particular deals; this paper tries to explain its development during the 1970s in terms of market equilibrium. More precisely, we focus with a partial equilibrium model (GTM) on three important years for gas industry and show that, while equilibrium can easily qualify 1974, short-term considerations have to be introduced to explain the market in 1978. The analysis is further pursued until 1980 where we investigate the price increases that took place during that period.

Security-constrained dispatch gives financially and economically significant nodal prices

Those who would like to dispense with congestion-based nodal prices argue that congestion occurs only infrequently. In truth, theoretical and real-world tests show that network congestion is a frequent occurrence and should generate significant revenues.

Optimal development planning of gas reserves

Decisions to develop gas resources in less developed countries require a careful appraisal of their possible utilization in the various sectors of the economy. Not only need major potential consumers such as petrochemical or fertilizer industries be taken into account but more diffuse phenomena such as the competition with other fuel forms for the supply of some energy intensive services or the conquest of new markets have to be considered. We present here a gas planning model based on the basic ideas of the theory of non-renewable resources which allows a look at the field development problem while simultaneously taking account of the impact competition may have on the demand side. The use of the model is illustrated on a study carried out for the World Bank on a gas timing development problem that occurred some time ago in Indonesia.

Using Column Generation Techniques for Treating Dynamic Multisectoral Models with Price-Dependent Coefficients

Column generation has a reputation for poor convergence. We report numerical experiments conducted with large multisectoral models having price-sensitive technical coefficients. Surprisingly, we did not observe tail convergence problems or experience other difficulties that are typically ascribed to problems that contain similar columns.

The Manne-Chao-Wilson algorithm for computing competitive equilibria: A modified version and its implementation

We present a modification of the Manne-Chao-Wilson algorithm for computing competitive equilibria and discuss some of its convergence properties. Numerical experiments involving models with up to 100 price responsive agents are provided.

Energy Security and Long-term Arrangements

This book fills a gap in the existing literature by dealing with several issues linked to long-term contracts and the efficiency of electricity markets. These include the impact of long-term contracts and vertical integration on effective competition, generation investment in risky markets, and the challenges for competition policy principles.

Measuring the Consequences of the Take or Pay Clauses in Natural Gas Consuming Countries

Imports of natural gas are subject to more or less rigid take or pay clauses in which the buyer promises to lift a certain amount of natural gas or to pay for it. This arrangement implies large risks on the buyer by committing him to buy fixed quantities of a product over a long horizon without prior knowledge of the price. Because of the uncertainty on the future price of natural gas, the take or pay clause is bound to induce surpluses or shortages of natural gas in the importing countries. The paper first casts the problem of choosing the optimal mix of gas imports in a statistical decision analysis context. Applying this approach requires an analysis of how the economy is able to cope with committed quantities that are short or in excess of the demand that materializes at the market prices. This is examined using a multitemporal equilibrium model which accounts for the substitution of gas with oil products in the main industries and in the power sector. Other substitutions with capital, labour, electrical energy and other material are also allowed in the industrial sectors. The analysis is presented in the context of the Belgian situation but with artificial data.