Page 76 - Impiantistica Industriale - Settembre Ottobre 2014
P. 76
process of globalization, the 1.0 Expected future electricity
institution of domestic competition, sector structure
and the spread of neo-liberalism
facilitated the rise of liberalization policy An industry is a natural monopoly if the total output
during the 1980s within the European
Community (EU). On the framework of this industry can be produced more cheaply by
of this competition policy (the core of the “Treaty one single firm than by more than one firm. If the cost
of Rome”), European governments moved to advantage of one single firm is slight, this industry
include electricity sector on their privatization and is a very weak natural monopoly, and the opening
competition strategy. of a competitive market could be advantageous.
At “Power-Gen Europe 2004” G. Dodero and V. On the contrary, it is clear that if the cost advantage
Annoni presented the paper “Liberalization success to control the electricity sector from one single firm
or not: advantages is high, the best choice
and disadvantages of The main reason of the difficulty will be to allow a regulated
liberalization in power monopoly.
sector” [1]. The main of a real competition in power sector The liberalization of the
reason of the difficulty is physics: the difficulty of transporting electricity sector moved
of a real competition and storing electricity prevents it from from the main idea of
in power sector is becoming a fully global industry in the open access to networks
physics: the difficulty of operational sense developed by American
transporting and storing economists during the
electricity prevents it 1970s and the beginning
from becoming a fully of the 1980s for network
global industry in the economies in general [3].
operational sense. Because electricity cannot be On the proposed new model for air transportation,
easily stored and must be delivered by a costly telecommunications, gas and electricity, the main
interconnected network, geographical constraints physical infrastructures of these networks remain
reduce the opportunities of a real direct and regulated natural monopolies (airports, cables,
remunerative competition in the global electricity pipelines and electrical lines), while the remaining
sector. structures will be submitted to competition (airlines,
In the meanwhile, from 2008 to now there was gas and electricity production).
a huge increase of renewable assets whose But it is important underline that Europe moved in
generated power is becoming day by day more the 1980s to facilitate liberalization without taking in
competitive and that are creating problems of their account the differences between Europe and US.
integration with fossil and nuclear generation mix. The six topics that have a large impact on electricity
Within this short period of time the framework cost and prices are:
of electricity sector is changing, is subject to • structure of the Electricity Supply Industry
important challenges also because the operating (ESI);
hours of fossil and nuclear plants are reducing • electricity production cost;
creating financial losses to the utilities and finally • electricity transportation cost;
an increase of kWh prices to compensate at least • electricity distribution cost;
partially these financial losses. • cost for environmental protection;
To answer to the main questions of the title, we will • adoption in time of advanced technologies.
analyze the different topics of the electricity market
and if could be reasonable that the authorities But today the huge increase of the renewable
organize again the electricity sector according power generation assets and the discovery of shale
to a vertical management control to facilitate the gas are completely changing the prospects of this
solution of all the following incoming topics: sector and it is not easy to foresee what will be the
• integration of renewables into the generation future structure of electricity sector. And obviously
mix; situation is different country by country.
• adequate policy to increase the flexibility of
• existing fossil units; 1.1 Adapting to change: how is
balance of renewables incentives so to avoid the electricity sector facing the
challenge?
• to close many fossil units;
• research of advanced energy storage systems;
reduction of the environmental impact;
• improvement of transmission and distribution To understand at its best the situation it is important
grids so to allow the best management of the to remember that in Italy the 16 June 13, from 1 to
renewable power and of the incoming energy 3 p.m., the electricity price moved to zero.
storage systems distributed mainly within the Also in Germany we have observed several days in
distributed grids. which power generation from renewables provided
Impiantistica Italiana - Settembre - Ottobre 2014 75
institution of domestic competition, sector structure
and the spread of neo-liberalism
facilitated the rise of liberalization policy An industry is a natural monopoly if the total output
during the 1980s within the European
Community (EU). On the framework of this industry can be produced more cheaply by
of this competition policy (the core of the “Treaty one single firm than by more than one firm. If the cost
of Rome”), European governments moved to advantage of one single firm is slight, this industry
include electricity sector on their privatization and is a very weak natural monopoly, and the opening
competition strategy. of a competitive market could be advantageous.
At “Power-Gen Europe 2004” G. Dodero and V. On the contrary, it is clear that if the cost advantage
Annoni presented the paper “Liberalization success to control the electricity sector from one single firm
or not: advantages is high, the best choice
and disadvantages of The main reason of the difficulty will be to allow a regulated
liberalization in power monopoly.
sector” [1]. The main of a real competition in power sector The liberalization of the
reason of the difficulty is physics: the difficulty of transporting electricity sector moved
of a real competition and storing electricity prevents it from from the main idea of
in power sector is becoming a fully global industry in the open access to networks
physics: the difficulty of operational sense developed by American
transporting and storing economists during the
electricity prevents it 1970s and the beginning
from becoming a fully of the 1980s for network
global industry in the economies in general [3].
operational sense. Because electricity cannot be On the proposed new model for air transportation,
easily stored and must be delivered by a costly telecommunications, gas and electricity, the main
interconnected network, geographical constraints physical infrastructures of these networks remain
reduce the opportunities of a real direct and regulated natural monopolies (airports, cables,
remunerative competition in the global electricity pipelines and electrical lines), while the remaining
sector. structures will be submitted to competition (airlines,
In the meanwhile, from 2008 to now there was gas and electricity production).
a huge increase of renewable assets whose But it is important underline that Europe moved in
generated power is becoming day by day more the 1980s to facilitate liberalization without taking in
competitive and that are creating problems of their account the differences between Europe and US.
integration with fossil and nuclear generation mix. The six topics that have a large impact on electricity
Within this short period of time the framework cost and prices are:
of electricity sector is changing, is subject to • structure of the Electricity Supply Industry
important challenges also because the operating (ESI);
hours of fossil and nuclear plants are reducing • electricity production cost;
creating financial losses to the utilities and finally • electricity transportation cost;
an increase of kWh prices to compensate at least • electricity distribution cost;
partially these financial losses. • cost for environmental protection;
To answer to the main questions of the title, we will • adoption in time of advanced technologies.
analyze the different topics of the electricity market
and if could be reasonable that the authorities But today the huge increase of the renewable
organize again the electricity sector according power generation assets and the discovery of shale
to a vertical management control to facilitate the gas are completely changing the prospects of this
solution of all the following incoming topics: sector and it is not easy to foresee what will be the
• integration of renewables into the generation future structure of electricity sector. And obviously
mix; situation is different country by country.
• adequate policy to increase the flexibility of
• existing fossil units; 1.1 Adapting to change: how is
balance of renewables incentives so to avoid the electricity sector facing the
challenge?
• to close many fossil units;
• research of advanced energy storage systems;
reduction of the environmental impact;
• improvement of transmission and distribution To understand at its best the situation it is important
grids so to allow the best management of the to remember that in Italy the 16 June 13, from 1 to
renewable power and of the incoming energy 3 p.m., the electricity price moved to zero.
storage systems distributed mainly within the Also in Germany we have observed several days in
distributed grids. which power generation from renewables provided
Impiantistica Italiana - Settembre - Ottobre 2014 75
