The Electric Power Industry Structure and Integrated Resource Planning

Panel: Panel 1: Policy and Programmes - Who can deliver DSM?

Author:
Aviel Verbruggen, University of Antwerp

Abstract

The paper discusses a normative model for the European electricity industry. A sustainable use and generation of electricity is our goal. Cost economies in organising the major functions of a power system, i.e. generation, transmission and distribution, are the constraints. The main characteristics of the normative model are as follows

the power industry structure is opened up for competition in generation. Competition is maximised by competitive bidding procedures in licensing plant construction and in committing units for energy deliveries
the distribution utilities are preferably pubhc companies with a multi-scope working area and regulated for service companies
complete unbundling of the three major functions of power supply, i.e. generation, transmission and distribution is necessary
a central role is assigned to the single pool operator, owning and governing the transmission grid, ordering or accepting generation capacities and selling power at the large load centers
there is no free TPA (Third Party Access). Generators can only sell to the pool and customers can only buy at the pool. The system is levelized so that only large generators and customers deal witb the pool directly. The other ones deal with the distribution utilities
here is one common tariff structure for large customers (industries and distribution utilities alike) based on the short-run marginal costs of power supply
a distinction is made between generation companies and Independent Generators of Own Power (IGOPs). The latter are recognised to have a special position as both suppliers and consumers of grid power
the proposed system can only function with a regulating office at the European level supervising the pool, and with national or regionaI offices supervising the distribution companies.

The performances of the normative structure and of the vertically integrated structure are assessed with a set of five criteria, 1.e. sustainability, economic efficiency, regulatory efficiency, institutional feasibility and equity. We conclude that the open structure is more promising for realizing Integrated Resource Planning (IRP), when the latter focuses ~ more on Resources than Planning.