Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector
This paper examines the lessons from independent transmission system operators in energy in the context of the potential introduction of an independent system operator in the water sector. A key lesson from the energy sector is that there is a basic choice between having an independent system operator (ISO) and an independent transmission system operator (ITSO) covering two or more existing company areas. ISOs do not own any wires or pipes, ITSOs do own wires or pipes. We begin by examining the nature of system operation arrangements in different countries, focussing on different ways that non-discriminatory access to monopoly transmission assets can be facilitated. We go on to discuss the particular functions of the ISO, focussing on the US, with regard to controlling the system and operating the power markets. We also detail the costs of system operation. Next, we focus on incentive issues and the governance of ISOs around the world. We outline an ideal model for an electricity system operator and examine the extent to which systems in the US and UK conform to the ideal. We also explore the issue of pricing access to the system and how system operation costs are paid for. Then, we look at the evolving role of system operators and how they might be evaluated. Finally we apply the learning from system operation in energy across to the UK water sector and offer some interim conclusions.
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.:
- Stratford Douglas, 2006. "Measuring Gains from Regional Dispatch: Coal-Fired Power Plant Utilization and Market Reforms," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 119-138.
- Vogelsang, Ingo, 2001. "Price Regulation for Independent Transmission Companies," Journal of Regulatory Economics, Springer, vol. 20(2), pages 141-65, September.
- Giulietti, Monica & Grossi, Luigi & Waterson, Michael, 2010.
"Price transmission in the UK electricity market: Was NETA beneficial?,"
Elsevier, vol. 32(5), pages 1165-1174, September.
- Giulietti, Monica & Grossi, Luigi & Waterson, Michael, 2009. "Price transmission in the UK electricity market : was NETA beneficial?," The Warwick Economics Research Paper Series (TWERPS) 913, University of Warwick, Department of Economics.
- Kristiansen, T. & Rosellón, J., 2010.
"Merchant electricity transmission expansion: A European case study,"
Elsevier, vol. 35(10), pages 4107-4115.
- Tarjei Kristiansen & Juan Rosellón, 2010. "Merchant Electricity Transmission Expansion: A European Case Study," Discussion Papers of DIW Berlin 1028, DIW Berlin, German Institute for Economic Research.
- Juan Rosellon & Tarjei Kristiansen, 2007. "Merchant Electricity Transmission Expansion: A European Case Study," Working papers DTE 391, CIDE, División de Economía.
- Deng, Shi-Jie & Oren, Shmuel & Meliopoulos, A.P., 2010. "The inherent inefficiency of simultaneously feasible financial transmission rights auctions," Energy Economics, Elsevier, vol. 32(4), pages 779-785, July.
- Robert Michaels, 2008. "Electricity Market Monitoring and the Economics of Regulation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(3), pages 197-216, May.
- Isemonger, Alan G., 2009. "The evolving design of RTO ancillary service markets," Energy Policy, Elsevier, vol. 37(1), pages 150-157, January.
- Enese Lieb-Doczy & Isabelle McKenzie & David Squires, 2008. "Unbundling ownership and control: international experience of independent system operators," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 29(1/2), pages 133-142.
- Pollitt, M., 2007.
"The arguments for and against ownership unbundling of energy transmission networks,"
Cambridge Working Papers in Economics
0737, Faculty of Economics, University of Cambridge.
- Pollitt, Michael, 2008. "The arguments for and against ownership unbundling of energy transmission networks," Energy Policy, Elsevier, vol. 36(2), pages 704-713, February.
- John Kwoka, 2008. "Restructuring the U.S. Electric Power Sector: A Review of Recent Studies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(3), pages 165-196, May.
- Vincent Rious & Sophie Plumel, 2006. "An operational and institutional modular analysis framework of Transmission and System Operator Why Transmission and System Operators are not ideal ones," Post-Print hal-00228320, HAL.
- Puga, J. Nicolas & Lesser, Jonathan A., 2009. "Public Policy and Private Interests: Why Transmission Planning and Cost-Allocation Methods Continue to Stifle Renewable Energy Policy Goals," The Electricity Journal, Elsevier, vol. 22(10), pages 7-19, December.
- Pollitt, M. & Bialek, J., 2007. "Electricity Network Investment And Regulation For A Low Carbon Future," Cambridge Working Papers in Economics 0750, Faculty of Economics, University of Cambridge.
- Rosellón Juan, 2003. "Different Approaches Towards Electricity Transmission Expansion," Review of Network Economics, De Gruyter, vol. 2(3), pages 1-32, September.
- Adamson, Seabron & Noe, Thomas & Parker, Geoffrey, 2010. "Efficiency of financial transmission rights markets in centrally coordinated periodic auctions," Energy Economics, Elsevier, vol. 32(4), pages 771-778, July.
- Bushnell, James & Wolfram, Catherine, 2008. "Electricity Markets," Staff General Research Papers Archive 31547, Iowa State University, Department of Economics.
- Barmack, Matthew & Kahn, Edward & Tierney, Susan & Goldman, Charles, 2008. "Econometric models of power prices: An approach to market monitoring in the Western US," Utilities Policy, Elsevier, vol. 16(4), pages 307-320, December.
- Zhang, Ning, 2009. "Market performance and bidders' bidding behavior in the New York Transmission Congestion Contract market," Energy Economics, Elsevier, vol. 31(1), pages 61-68, January.
- Boyce, John R. & Hollis, Aidan, 2005. "Governance of electricity transmission systems," Energy Economics, Elsevier, vol. 27(2), pages 237-255, March.
- Sauma, Enzo E. & Oren, Shmuel S., 2009. "Do generation firms in restructured electricity markets have incentives to support social-welfare-improving transmission investments?," Energy Economics, Elsevier, vol. 31(5), pages 676-689, September.
- Sioshansi, Fereidoon P., 2008. "Competitive Electricity Markets: Questions Remain about Design, Implementation, Performance," The Electricity Journal, Elsevier, vol. 21(2), pages 74-87, March.
- Abdala, Manuel A., 2008. "Governance of competitive transmission investment in weak institutional systems," Energy Economics, Elsevier, vol. 30(4), pages 1306-1320, July.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1153. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.