IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v36y2008i11p4159-4167.html

How to make a European integrated market in small and isolated electricity systems? The case of the Canary Islands

Author

Listed:
  • Perez, Yannick
  • Ramos Real, Francisco Javier

Abstract

This paper presents a geographic dimension not often studied in the dynamics of creating an internal market for electricity within the European Union, namely the case of small European electricity systems like those found on the Greek islands of Cyprus and Crete. Our question, then, is how to achieve a suitable internal market for electricity in small and isolated systems. To address this issue, we identify the main problems to be overcome by introducing a methodology in which the Canary Islands experience is taken as a case study for understanding the challenges in creating an "EU-like market for electricity". Our results show that the design of the vertical industrial structure and the figure of the grid operator and its attributes are key features for the proper operation of any electrical system. We also stress the minor roles of other possible options to achieve this EU-compatible market by highlighting first, in the wholesale market, the call-for-tender solution to introduce more generation and the risk of using safety requirements as barriers to entry in these small markets, and second, in the supply activities, the potential problems of an improperly regulated tariff scheme.

Suggested Citation

  • Perez, Yannick & Ramos Real, Francisco Javier, 2008. "How to make a European integrated market in small and isolated electricity systems? The case of the Canary Islands," Energy Policy, Elsevier, vol. 36(11), pages 4159-4167, November.
    • Handle: RePEc:eee:enepol:v:36:y:2008:i:11:p:4159-4167
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(08)00239-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Dominique Finon & Yannick Perez, 2007. "Transactional Efficiency and Public Promotion of Environmental Technologies: The Case of Renewable Energies in the Electric Industry," Post-Print hal-01660443, HAL.
    2. repec:aen:journl:2005se-a06 is not listed on IDEAS
    3. Ramos-Real, Francisco Javier, 2005. "Cost functions and the electric utility industry. A contribution to the debate on deregulation," Energy Policy, Elsevier, vol. 33(1), pages 69-87, January.
    4. Jean-Michel Glachant & Yannick Perez & Hans Auer & Haas Reinhard & Nenad Keseric, 2006. "The Liberalisation of the Continental European Electricity Market - Lessons Learned," Post-Print hal-01660447, HAL.
    5. Barquin, Julian & Bergman, Lars & Crampes, Claude & Glachant, Jean-Michel & Green, Richard & Von Hirschhausen, Christian & Lévêque, François & Stoft, Steven, 2006. "The Acquisition of Endesa by Gas Natural: Why the Antitrust Authorities Are Right to Be Cautious," The Electricity Journal, Elsevier, vol. 19(2), pages 62-68, March.
    6. Crampes , C. & Fabra , N., 2005. "The Spanish Electricity Industry: Plus ça change …," Cambridge Working Papers in Economics 0502, Faculty of Economics, University of Cambridge.
    7. Stephen Littlechild, 2007. "Beyond regulation," Chapters, in: Colin Robinson (ed.), Utility Regulation in Competitive Markets, chapter 1, Edward Elgar Publishing.
    8. Peter Cramton & Steven Stoft, 2006. "The Convergence of Market Designs for Adequate Generating Capacity," Papers of Peter Cramton 06mdfra, University of Maryland, Department of Economics - Peter Cramton, revised 2006.
    9. Weisser, Daniel, 2004. "Power sector reform in small island developing states: what role for renewable energy technologies?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 8(2), pages 101-127, April.
    10. Weisser, Daniel, 2004. "On the economics of electricity consumption in small island developing states: a role for renewable energy technologies?," Energy Policy, Elsevier, vol. 32(1), pages 127-140, January.
    11. José Ignacio Sánchez-Macías & Pedro Calero Pérez, 2003. "Regulación de las tarifas de acceso a las redes y liberalización del sector eléctrico español," Hacienda Pública Española / Review of Public Economics, IEF, vol. 166(3), pages 61-83, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. P Codani & Marc Petit & Yannick Perez, 2018. "Innovation et règles inefficaces : le cas des véhicules électriques," Post-Print halshs-01980639, HAL.
    2. Marrero, Gustavo A. & Ramos-Real, Francisco Javier, 2010. "Electricity generation cost in isolated system: The complementarities of natural gas and renewables in the Canary Islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2808-2818, December.
    3. Alonso, Patricia Martínez & Hewitt, Richard & Pacheco, Jaime Díaz & Bermejo, Lara Román & Jiménez, Verónica Hernández & Guillén, Jara Vicente & Bressers, Hans & de Boer, Cheryl, 2016. "Losing the roadmap: Renewable energy paralysis in Spain and its implications for the EU low carbon economy," Renewable Energy, Elsevier, vol. 89(C), pages 680-694.
    4. Ries, Jan & Gaudard, Ludovic & Romerio, Franco, 2016. "Interconnecting an isolated electricity system to the European market: The case of Malta," Utilities Policy, Elsevier, vol. 40(C), pages 1-14.
    5. Rabindra Nepal & Flavio Menezes, 2017. "Regulatory Reforms in Small Energy Systems: Experience from Australia's Northern Territory Electricity Market," Economic Papers, The Economic Society of Australia, vol. 36(3), pages 300-316, September.
    6. Carlos Pereyra-Mariñez & Félix Santos-García & Víctor S. Ocaña-Guevara & Alexander Vallejo-Díaz, 2022. "Energy Supply System Modeling Tools Integrating Sustainable Livelihoods Approach—Contribution to Sustainable Development in Remote Communities: A Review," Energies, MDPI, vol. 15(7), pages 1-17, April.
    7. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    8. Gustavo A. Marrero & Yannick Perez & Marc Petit & Francisco Javier Ramos-Real, 2015. "Electric vehicle fleet contributions for isolated systems. The case of the Canary Islands," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 15(2), pages 171-193.
    9. Psarros, Georgios N. & Papathanassiou, Stavros A., 2023. "Generation scheduling in island systems with variable renewable energy sources: A literature review," Renewable Energy, Elsevier, vol. 205(C), pages 1105-1124.
    10. Judit Mendoza Aguilar & Francisco J. Ramos-Real & Alfredo J. Ramírez-Díaz, 2019. "Improving Indicators for Comparing Energy Poverty in the Canary Islands and Spain," Energies, MDPI, vol. 12(11), pages 1-15, June.
    11. Erdinc, Ozan & Paterakis, Nikolaos G. & Catalão, João P.S., 2015. "Overview of insular power systems under increasing penetration of renewable energy sources: Opportunities and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 333-346.
    12. Psarros, Georgios N. & Dratsas, Pantelis A. & Papathanassiou, Stavros A., 2021. "A comparison between central- and self-dispatch storage management principles in island systems," Applied Energy, Elsevier, vol. 298(C).
    13. Nardi, Paolo, 2012. "Transmission network unbundling and grid investments: Evidence from the UCTE countries," Utilities Policy, Elsevier, vol. 23(C), pages 50-58.
    14. Rabindra Nepal & Flavio Menezes, 2016. "Small Energy Markets, Scattered Networks and Regulatory Reforms: The Australian Experience," Discussion Papers Series 561, School of Economics, University of Queensland, Australia.
    15. Villarroel, Nicolás & Lazo, Joaquín & Watts, David, 2025. "High energy costs in insular energy systems and the potential for integrating innovative renewable solutions: The case of Chile," Renewable Energy, Elsevier, vol. 246(C).
    16. Alfredo Ramírez Díaz & Francisco J. Ramos-Real & Gustavo A. Marrero & Yannick Perez, 2015. "Impact of Electric Vehicles as Distributed Energy Storage in Isolated Systems: The Case of Tenerife," Sustainability, MDPI, vol. 7(11), pages 1-27, November.
    17. Rious, Vincent & Perez, Yannick, 2014. "Review of supporting scheme for island powersystem storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 754-765.
    18. Vincent Rious & Yannick Perez, 2012. "What type(s) of support schemes for storage in island power systems?," RSCAS Working Papers 2012/70, European University Institute.
    19. Mohammad Nure Alam, 2021. "Accessing the Effect of Renewables on the Wholesale Power Market," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 341-360.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rious, Vincent & Perez, Yannick, 2014. "Review of supporting scheme for island powersystem storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 754-765.
    2. Dornan, Matthew & Jotzo, Frank, 2015. "Renewable technologies and risk mitigation in small island developing states: Fiji’s electricity sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 35-48.
    3. Shirley, Rebekah & Kammen, Daniel, 2013. "Renewable energy sector development in the Caribbean: Current trends and lessons from history," Energy Policy, Elsevier, vol. 57(C), pages 244-252.
    4. Romano, Antonio A. & Scandurra, Giuseppe & Carfora, Alfonso & Pansini, Rosaria V., 2016. "Assessing the determinants of SIDS' pattern toward sustainability: A statistical analysis," Energy Policy, Elsevier, vol. 98(C), pages 688-699.
    5. van Alphen, Klaas & Kunz, Huden S. & Hekkert, Marko P., 2008. "Policy measures to promote the widespread utilization of renewable energy technologies for electricity generation in the Maldives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(7), pages 1959-1973, September.
    6. van Alphen, Klaas & van Sark, Wilfried G.J.H.M. & Hekkert, Marko P., 2007. "Renewable energy technologies in the Maldives--determining the potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(8), pages 1650-1674, October.
    7. Weigt, Hannes, 2009. "A Review of Liberalization and Modeling of Electricity Markets," MPRA Paper 65651, University Library of Munich, Germany.
    8. Marrero, Gustavo A. & Ramos-Real, Francisco Javier, 2010. "Electricity generation cost in isolated system: The complementarities of natural gas and renewables in the Canary Islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2808-2818, December.
    9. Matthew Dornan & Frank Jotzo, 2012. "Renewable Technologies and Risk Mitigation in Small Island Developing States (SIDS): Fiji's Electricity Sector," Crawford School Research Papers 1201, Crawford School of Public Policy, The Australian National University.
    10. Vincent Rious & Yannick Perez, 2012. "What type(s) of support schemes for storage in island power systems?," RSCAS Working Papers 2012/70, European University Institute.
    11. Notton, Gilles, 2015. "Importance of islands in renewable energy production and storage: The situation of the French islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 260-269.
    12. Reynolds, Travis & Kolodinsky, Jane & Murray, Byron, 2012. "Consumer preferences and willingness to pay for compact fluorescent lighting: Policy implications for energy efficiency promotion in Saint Lucia," Energy Policy, Elsevier, vol. 41(C), pages 712-722.
    13. Hua, Jian & Shiu, Hong-Gwo, 2018. "Sustainable development of renewable energy on Wangan Island, Taiwan," Utilities Policy, Elsevier, vol. 55(C), pages 200-208.
    14. Gustavo A. Marrero & Yannick Perez & Marc Petit & Francisco Javier Ramos-Real, 2015. "Electric vehicle fleet contributions for isolated systems. The case of the Canary Islands," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 15(2), pages 171-193.
    15. Roques, Fabien A., 2008. "Market design for generation adequacy: Healing causes rather than symptoms," Utilities Policy, Elsevier, vol. 16(3), pages 171-183, September.
    16. Dornan, Matthew, 2014. "Reform despite politics? The political economy of power sector reform in Fiji, 1996–2013," Energy Policy, Elsevier, vol. 67(C), pages 703-712.
    17. Dornan, Matthew & Shah, Kalim U., 2016. "Energy policy, aid, and the development of renewable energy resources in Small Island Developing States," Energy Policy, Elsevier, vol. 98(C), pages 759-767.
    18. Bénard-Sora, Fiona & Praene, Jean Philippe, 2016. "Territorial analysis of energy consumption of a small remote island: Proposal for classification and highlighting consumption profiles," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 636-648.
    19. Chen, Fengzhen & Duic, Neven & Manuel Alves, Luis & da Graça Carvalho, Maria, 2007. "Renewislands--Renewable energy solutions for islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(8), pages 1888-1902, October.
    20. Christian von Hirschhausen & Hannes Weigt, 2007. "Aktive Wettbewerbspolitik für effiziente Elektrizitätserzeugungsmärkte: Instrumente, internationale Erfahrungen und wirtschaftspolitische Schlussfolgerungen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(1), pages 65-86.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:36:y:2008:i:11:p:4159-4167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.