Energy Regulation in a Low Carbon World
AbstractThis chapter discusses the implications of an increasing proportion of renewable energy for the way in which energy companies are regulated. While the scope of regulation varies from country to country, depending on the degree of liberalisation, an increase in the overall cost of energy, and a shift from operating to capital costs will be relevant for all regulators. Where there is third party access to transmission, the tariffs may need to send stronger signals of the relative costs imposed by generators in different places, and may have significant effects on their profitability. Regulators responsible for generation revenues will have to allow peaking plants to recover their costs, even if those are rarely-used reserves to cope with intermittent renewable generation. Regulators in control of final prices charged to consumers will probably have to pass on a higher cost of energy, and determine how much is paid by different groups. The shift to renewable energy, however, will not change the fundamental tasks or nature of economic regulation.
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Bibliographic InfoPaper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 10-16.
Length: 38 pages
Date of creation: Jan 2010
Date of revision:
Economic regulation; renewable energy; electricity; transmission pricing;
Find related papers by JEL classification:
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-22 (All new papers)
- NEP-ENE-2010-05-22 (Energy Economics)
- NEP-ENV-2010-05-22 (Environmental Economics)
- NEP-REG-2010-05-22 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Severin Borenstein, 2005. "The Long-Run Efficiency of Real-Time Electricity Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 93-116.
- Pollitt, M.G., 2004.
"Electricity Reform in Chile: Lessons for Developing Countries,"
Cambridge Working Papers in Economics
0448, Faculty of Economics, University of Cambridge.
- M. Pollitt, 2004. "Electricity reform in Chile. Lessons for developing countries," Competition and Regulation in Network Industries, Intersentia, vol. 5(3), pages 221-263, September.
- Michael Pollitt, 2004. "Electricity Reform in Chile Lessons for Developing Countries," Working Papers 0416, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
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