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Effect of regulation on power-plant operation and investment in the South East Europe Market: An analysis of two cases

Author

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  • Višković, Alfredo
  • Franki, Vladimir
  • Valentić, Vladimir

Abstract

This paper analyses the differences between investment decisions for coal-fired power plants in Croatia and in Bosnia and Herzegovina (BiH). The long-run marginal cost (LRMC) of each plant is calculated based on a technical analysis that accounts for the important influences on overall project costs by combining a mathematical model and a simulation model. The former was used to calculate annual costs and the latter to predict power plant performance on the electricity market. This research offers insights about potential risks associated with power-plant investment with a particular focus on the regulatory framework and the relevance of participation in the European Union Emissions Trading Scheme (EU ETS) for costs, prices, and environmental impacts.

Suggested Citation

  • Višković, Alfredo & Franki, Vladimir & Valentić, Vladimir, 2014. "Effect of regulation on power-plant operation and investment in the South East Europe Market: An analysis of two cases," Utilities Policy, Elsevier, vol. 30(C), pages 8-17.
  • Handle: RePEc:eee:juipol:v:30:y:2014:i:c:p:8-17
    DOI: 10.1016/j.jup.2014.06.001
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    References listed on IDEAS

    as
    1. Vailati, Riccardo, 2009. "Electricity transmission in the energy community of South East Europe," Utilities Policy, Elsevier, vol. 17(1), pages 34-42, March.
    2. Jamasb, T. & Mota, R. & Newbery, D. & Pollitt, M., 2004. "‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’," Cambridge Working Papers in Economics 0439, Faculty of Economics, University of Cambridge.
    3. Arocena, Pablo & Waddams Price, Catherine, 2002. "Generating efficiency: economic and environmental regulation of public and private electricity generators in Spain," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 41-69, January.
    4. Hooper, Elizabeth & Medvedev, Andrei, 2009. "Electrifying integration: Electricity production and the South East Europe regional energy market," Utilities Policy, Elsevier, vol. 17(1), pages 24-33, March.
    5. Deitz, Laura & Stirton, Lindsay & Wright, Kathryn, 2009. "South East Europe's electricity sector: Attractions, obstacles and challenges of Europeanisation," Utilities Policy, Elsevier, vol. 17(1), pages 4-12, March.
    6. Helm, Dieter, 2004. "Energy, the State, and the Market: British Energy Policy since 1979," OUP Catalogue, Oxford University Press, number 9780199270743.
    7. Alfredo Viskovic & Vladimir Valentic & Vladimir Franki, 2013. "The impac t of carbon prices on CCS investment in South East Europe," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(3), pages 91-120.
    8. Pollitt, Michael, 2009. "Evaluating the evidence on electricity reform: Lessons for the South East Europe (SEE) market," Utilities Policy, Elsevier, vol. 17(1), pages 13-23, March.
    9. Jamasb, T., 2002. "Reform and Regulation of the Electricity Sectors in Developing Countries," Cambridge Working Papers in Economics 0226, Faculty of Economics, University of Cambridge.
    10. Jeong, Suk-Jae & Kim, Kyung-Sup & Park, Jin-Won & Lim, Dong-soon & Lee, Seung-moon, 2008. "Economic comparison between coal-fired and liquefied natural gas combined cycle power plants considering carbon tax: Korean case," Energy, Elsevier, vol. 33(8), pages 1320-1330.
    11. Scholl, Brian, 2009. "Electricity reform in Bosnia and Herzegovina," Utilities Policy, Elsevier, vol. 17(1), pages 49-64, March.
    12. Rubin, Edward S. & Chen, Chao & Rao, Anand B., 2007. "Cost and performance of fossil fuel power plants with CO2 capture and storage," Energy Policy, Elsevier, vol. 35(9), pages 4444-4454, September.
    13. Višković, Alfredo & Franki, Vladimir & Valentić, Vladimir, 2014. "CCS (carbon capture and storage) investment possibility in South East Europe: A case study for Croatia," Energy, Elsevier, vol. 70(C), pages 325-337.
    14. Price, Catherine Waddams & Pham, Khac, 2009. "The impact of electricity market reform on consumers," Utilities Policy, Elsevier, vol. 17(1), pages 43-48, March.
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    Citations

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    Cited by:

    1. Franki, Vladimir & Višković, Alfredo, 2015. "Energy security, policy and technology in South East Europe: Presenting and applying an energy security index to Croatia," Energy, Elsevier, vol. 90(P1), pages 494-507.
    2. repec:eee:energy:v:137:y:2017:i:c:p:1041-1053 is not listed on IDEAS
    3. repec:eee:juipol:v:45:y:2017:i:c:p:61-68 is not listed on IDEAS

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