Competitive Electricity Markets

Foreword Dr. Michael Pollitt Judge Business School and EPRG, University of Cambridge

Preface Professor Wolfgang Pfaffenberger Jacobs University Bremen

Introduction Electricity market reform: Progress and remaining challenges Fereidoon P. Sioshansi Menlo Energy Economics

Part One: Market reform evolution

Chapter 1 Reevaluation of vertical integration and unbundling Dr. Hung-po Chao ISO New England Prof. Shmuel Oren University of California, Berkeley Prof. Robert Wilson Stanford University

Chapter 2 Hybrid electricity markets and different patterns of restructuring
Dr. Aad F. Correlje and Dr. Laurens De Vries Delft University of Technology, The Netherlands

Chapter 3 Achieving electricity market integration in Europe Nigel Cornwall Cornwall Energy Consulting, UK

Part Two: Market performance, monitoring and demand participation

Chapter 4 Transmission markets, congestion management & investment Dr. Harry Singh FERC

Chapter 5 The design of U.S. wholesale energy and ancillary service auction markets: Theory and practice
Dr. Richard O’Neill & Dr. Udi Helman FERC
Prof. Ben Hobbs Johns Hopkins Univ.

Chapter 6 The cost of anarchy in self-commitment based electricity markets Dr. Ramteen Sioshansi & Professor Shmuel Oren University of California, Berkeley Dr. Richard O’Neill FERC

Chapter 7 Market power & market monitoring
Dr. Parviz Adib APX Dr. David Hurlbut National Renewable Energy Laboratory

Chapter 8 Demand participation in restructured markets Dr. Jay Zarnikau Frontier Associates

Part Three: Capacity, resource adequacy and investment

Chapter 9
Resource adequacy: Alternate perspectives and divergent paths
Dr. Parviz Adib APX Dr. Eric Schubert BP Energy Company Prof. Shmuel Oren University of California, Berkeley

Chapter 10 The evolution of PJM’s capacity market Dr. Joseph E. Bowring PJM Interconnection LLC

Chapter 11 Resource adequacy & efficient infrastructure investment: Evidence from Australia’s National Electricity Market
Dr. Alan Moran Institute of Public Affairs, Melbourne, Australia Benjamin S. Skinner TRUenergy, Melbourne, Australia

Part Four: Market design issues

Chapter 12 Promoting renewable energy: Lessons learned from 20 years of experimentation Professor Reinhard Haas Vienna University of Technology, Austria Professor Dr. Niels I. Meyer Technical University of Denmark Anne Held Fraunhofer Institute for Systems & Innovation Research, Karlsruhe, Germany Dr. Dominique Finon Centre International de Recherche pour l’Environnement et le Développement, France Professor Dr. Arturo Lorenzoni IEFE, Bocconi University, Italy Dr. Ryan Wiser Lawrence Berkeley National Lab, Berkeley, CA Ken-ichiro Nishio Central Research Institute of Electric Power Industry, Tokyo, Japan

Chapter 13 Distributed generation and the regulation of electricity networks
Dierk Bauknecht Oeko-Institut - Institute for Applied Ecology Professor Gert Brunekreeft Jacobs University Bremen

Chapter 14 Global climate change and the electric power industry
Professor Andrew Ford Washington State University

Chapter 15 Reform of the reforms in Brazil: Problems and solutions Professor João Lizardo R. H. de Araujo Director General of CEPEL Agnes Maria de Aragão da Costa, Tiago B. Correia Ministry of Energy, Brazil and Dr. Elbia Melo Director, Chamber for Electricity Trading, Brazil

Index

After 2 decades, policymakers and regulators agree that electricity market reform, liberalization and privatization remains partly art. Moreover, the international experience suggests that in nearly all cases, initial market reform leads to unintended consequences or introduces new risks, which must be addressed in subsequent “reform of the reforms.” Competitive Electricity Markets describes the evolution of the market reform process including a number of challenging issues such as infrastructure investment, resource adequacy, capacity and demand participation, market power, distributed generation, renewable energy and global climate change.

• Sequel to Electricity Market Reform: An International Perspective in the same series published in 2006
• Contributions from renowned scholars and practitioners on significant electricity market design and implementation issues
• Covers timely topics on the evolution of electricity market liberalization worldwide

Professionals, policy makers/regulators, students, researchers, and investors in the electric power sector, generating companies, distribution companies, manufacturers and suppliers