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Electricity Trade in Europe : Review of Economic and Regulatory Challenges - Janusz Bielecki

Electricity Trade in Europe

Review of Economic and Regulatory Challenges

By: Janusz Bielecki (Editor)

Hardcover Published: 1st May 2004
ISBN: 9789041122797
Number Of Pages: 350

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Liberalisation in the power sector is high on the agenda of policy makers, regulators and the industry around the world. There is growing recognition of the benefits of power marker liberalisation and the need to further integrate regional markets in a liberal trade and investment environment. This volume brings together articles written by leading experts in the field of electricity trade and regulation in Europe. Organised in two parts, the contributions cover a range of issues from market structure, trade flows, infrastructure and investment to the regulatory framework within which the industry operates, including international trade rules and national technical, environmental and regulatory regimes. These are complex and sensitive issues requiring an in-depth understanding of the economics and regulation of the electricity trade and the primary object of this volume is to contribute to an informed debate on the subject. To this end, the contributors demonstrate how a competition friendly and liberal environment for electricity trade, including a system of non-discriminatory and transparent access to transmission and distribution networks, could contribute to improving market integration, economic efficiency , supply security and environmental health.

Forewordp. xiii
List of Acronymsp. xvii
Operational and Economic Aspectsp. 1
Electricity Trade: Overview of Current Flows and Infrastructurep. 3
Introductionp. 4
Organisation of electricity marketsp. 6
Incentives to tradep. 7
Current inter-regional tradep. 8
Technical and economic barriers to tradep. 11
Infrastructure and other factors affecting tradep. 13
Generation capacityp. 13
Interconnectionsp. 17
Price differentialsp. 20
Outlook for inter-regional tradep. 21
European Interconnection: State of the Art 2003p. 23
Interconnected electric systems: present statusp. 24
Historical overviewp. 24
Main driving forces behind network integrationp. 26
The main blocksp. 26
Recent developmentsp. 31
The driving forcesp. 31
The projectsp. 32
Conclusions and recommendationsp. 42
Situation in Albaniap. 42
Incentives for investing in interconnection facilitiesp. 42
Ideas on long-term prospectsp. 43
Regional Electricity Cooperation and Integrationp. 47
Introductionp. 48
Benefits of regional integration of power systemsp. 50
Barriers to integrationp. 53
Institutional Frameworkp. 56
Integration of power networks in Eurasiap. 57
General remarksp. 57
The European internal electricity marketp. 59
The Mediterranean Ringp. 62
Expansion to the Eastp. 64
Conclusionsp. 66
Impact of Liberalisation on Investment Performance in the Power Sectorp. 69
Introductionp. 70
Background: issues, trends and policiesp. 73
Investment decisionsp. 73
Problems with the investment performance of electricity marketsp. 75
Policy tools: capacity mechanisms and price capsp. 76
Trends in IEA countriesp. 78
Generationp. 79
Introductionp. 79
Investment, reserves and fuel mix in liberalised marketsp. 80
Role of prices and market structurep. 81
Transmissionp. 83
Introductionp. 83
Policy implicationsp. 85
Options to relieve transmission congestionp. 87
Cross-border interconnectionsp. 89
Conclusionsp. 93
Development of Interconnections and Reliability Standardsp. 95
General contextp. 96
Transmission System Operators' associationsp. 96
Reliabilityp. 96
Short-term rule setting and long-term market watchdogp. 98
Interconnection typesp. 99
Development of interconnectionsp. 99
UCTE experience of synchronous developmentp. 99
Synchronous or asynchronous connection?p. 100
Main building blocks of a synchronous areap. 102
Primary control and reservesp. 102
Secondary and tertiary control and reservesp. 104
N-1 criterionp. 104
Data exchangep. 106
Stabilityp. 106
Control Areas: impediments or building blocks for a well-functioning market?p. 108
Synchronous versus asynchronous interconnection for new developments?p. 109
From technicalities to reliability standardsp. 110
The historical context of former UCPTEp. 110
Unbundling and the creation of UCTEp. 111
The UCTE Multi-Lateral Agreementp. 111
The Multi-Lateral Agreement's compensation for damagesp. 112
Reliability standards and synchronous area developmentp. 114
General position on synchronous area developmentp. 114
Towards definitive borders for the synchronous area?p. 115
Regulatory Aspectsp. 117
Overview of the Regulatory Environment for Trade in Electricityp. 119
Introductionp. 120
Industry structure, regulation and tradep. 120
Organisation of electricity marketsp. 121
WTO rules for electricity tradep. 122
General remarksp. 122
Definition of electricity: commodity or service?p. 123
WTO rules applicable to trade in electricity as a goodp. 126
Barriers to trade in electricityp. 129
General commentsp. 129
Monopolies and exclusive and special privileges (State Trading Enterprises)p. 130
Access to foreign customersp. 134
Reciprocity requirements for market accessp. 135
Trade measures for environmental purposesp. 137
Public service obligationsp. 144
Access to the networkp. 148
Long-term contractsp. 151
Concluding remarksp. 153
Role of Regulatory Arrangements in Developing the Power Marketsp. 155
Introductionp. 156
Overview of effective power tariffsp. 158
Progress in regulatory reformp. 161
Detailed reform experiencesp. 164
Hungaryp. 165
Kazakhstanp. 166
Moldovap. 169
Discussion and lessons learnedp. 170
Conclusionp. 177
International Energy Trade and Access to Networks: the Case of Electricityp. 179
Access to networks as precondition for cross-border trade in energy and energy servicesp. 180
The main concepts: natural monopoly, political economy and economic regulation of energy transport facilitiesp. 184
Natural monopolyp. 184
Third-Party Access (TPA)p. 186
Regulation and regulatorsp. 188
Political economyp. 192
Legal methods and concepts for TPAp. 194
Cross-border and international law issuesp. 199
Third-party accessp. 199
Cross-border energy transitp. 202
Energy import restrictionsp. 206
Conclusionp. 208
Cross Border Capacity Allocation Methodsp. 213
Introductionp. 214
Which countries need to measure cross-border transfer capacity?p. 215
Relevant conceptsp. 218
Network congestionp. 218
Net Transfer Capacityp. 221
Available Transfer Capacityp. 223
Methods of allocating transfer capacityp. 224
Methods acceptable within the EUp. 224
Possible allocation methods outside the EUp. 225
Other methods of allocating capacityp. 227
Identification of transmission asset owners and operatorsp. 228
Legal authority of energy regulatorsp. 229
Regulatory actions needed to address critical bottlenecksp. 231
Multilateral Rules and Trade in Energy Goods and Services: the Case of Electricityp. 235
Introductionp. 236
The electricity marketp. 238
International trade in services related to electricityp. 240
The multilateral GATS negotiations and their relevance for electricityp. 242
Classification issuesp. 242
Related financial servicesp. 247
Electricity generation and GATT and GATS disciplinesp. 248
Negotiating market liberalisation for electric power services: the "request and offer" processp. 251
Competition-related issuesp. 254
Public servicesp. 259
Conclusionsp. 261
Electricity Trade and Trade-Related Environmental Measuresp. 265
What are the environmental concerns and actions in the power sector?p. 266
What are the existing safety and environmental standards?p. 271
Nuclear safetyp. 271
Atmospheric emissionsp. 274
Why are trade restrictions not the most suitable instruments for environmental protection?p. 278
What other instruments could be used?p. 280
Concluding remarksp. 282
Trade-Neutral Policies for the Promotion of Electricity from Renewablesp. 285
Definition of renewable energy sourcesp. 286
Scope of the analysisp. 288
Typology of measuresp. 289
The evolving EU regimep. 291
EU support measuresp. 291
National support measuresp. 292
The GATT/WTO framework: general commentsp. 299
Preliminary remarks: Articles XX and IIIp. 300
The competitive relationshipp. 300
Less favourable treatmentp. 302
The scope of article XXp. 303
GATT Article XX(a), (b), and (g)p. 303
GATT Article XX(b)p. 303
GATT Article XX(g)p. 305
Jurisdictional application and processes and production methodsp. 308
The chapeau of GATT Article XXp. 311
Concluding remarksp. 314
Subsidies under the SCM agreementp. 316
Conclusionsp. 318
Table of Contents provided by Rittenhouse. All Rights Reserved.

ISBN: 9789041122797
ISBN-10: 9041122796
Series: International Energy & Resources Law & Policy : Book 22
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 350
Published: 1st May 2004
Country of Publication: NL
Dimensions (cm): 24.49 x 16.61  x 2.57
Weight (kg): 0.74