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2022 | Buch

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The Future of Electricity Retailing and How We Get There

verfasst von: Prof. Frank A. Wolak, Ian H. Hardman

Verlag: Springer International Publishing

Buchreihe : Lecture Notes in Energy

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book covers the current trends and challenges faced by regulators, policymakers, and researchers in the field of retail electricity market design and regulation. It addresses the role that “smart” technologies are playing in reshaping how utilities and consumers interact with each other and with their generating technologies. The book covers topics including smart meter adoption, dynamic pricing, demand response, distributed and utility-scale solar, technology costs trends, and the microeconomic theory that governs our understanding of retailer and consumer incentives. Existing inefficiencies of transmission and distribution network pricing as well as the potential regulatory approaches that can be used to remedy them are discussed along with the advantages of retail competition and draw attention to the barriers that currently are preventing all of the benefits of retail competition from materializing. The book uses very recent data to provide the most up-to-date overview of retailing trends and policies in the USA, Europe, Asia, Oceania, and Latin America.

The book will be useful for researchers and regulators and policymakers.

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Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction: Two Paths to the Future of Electricity Retailing

Abstract

Over the last several decades, an influx of technological change has shaken retail electricity sectors around the globe. While these new technologies can provide pivotal opportunities for revenue generation, grid reliability, and energy savings, they also impose a number of new challenges on regulators, retailers, and consumers. We introduce two regulatory responses that should be considered when approaching these challenges. A reactive approach allows regulators to take action on a case-by-case basis when new technologies are observed to be impinging on electricity retailers. The alternative is a forward-looking approach where the regulator takes early action in anticipation of technological changes. The choice of whether to pursue either of these should largely depend on an individual jurisdictions resource base, sustainability goals, and existing institutions and infrastructure. In this chapter we identify the initial conditions most conducive to successful adoption of these approaches and introduce the structure and content of the remainder of the book.

Frank A. Wolak, Ian H. Hardman

Chapter 2. Drivers of Change in the Retail Electricity Sector

Abstract

New technologies are driving change in the retail electricity sector. These technologies are primarily the result of the innovations in electronic monitoring and communications equipment. Advances in software engineering and the widespread availability of high-speed wired and wireless internet access are allowing these new technologies to take hold in both developed and developing jurisdictions around the globe. Here we discuss the technologies that have been, or will be, pivotal in changing the retail electricity sector.

Frank A. Wolak, Ian H. Hardman

Chapter 3. Regulatory Barriers to Change

Abstract

Regulatory barriers are major factors in determining the speed at which the technologies described in the previous chapter have been deployed. Some of these barriers are the result of the regulatory process not putting in place the necessary initial conditions for new technologies to be adopted or to be adopted in a cost effective manner. The lack of widespread deployment of interval metering is a prime example of this kind of barrier. Other barriers to change are the result of inefficient prices for regulated services, such as average cost pricing of transmission and distribution network services and annual average cost pricing of retail electricity. In this chapter we discuss these barriers and how to overcome them.

Frank A. Wolak, Ian H. Hardman

Chapter 4. Current State of Retail Markets

Abstract

Over the past three decades, electricity sectors in the United States have been re-structured through the formation of formal wholesale markets and retail competition. Some states have implemented retail competition without formal wholesale markets. Twenty states and the District of Columbia have enacted legislation to either fully or partially restructure their retail electricity markets (US EIA 2020; Quilici et al. 2019). Figure 4.1 illustrates the current status of state-level retail restructuring. Other than Vermont, all of New England has enacted legislation to allow retail competition. Much of the remainder of the Eastern Seaboard has as well. All Eastern states with retail competition, except Georgia, exist within the PJM Interconnection, ISO New England or New York ISO wholesale markets.

Frank A. Wolak, Ian H. Hardman

Chapter 5. Current State of Deployment

Abstract

In this chapter, we survey the extent of deployment of the major technologies impacting the retail electricity sector. Interval metering is the crucial enabling technology surveyed. Distributed solar is the major disruptive technology to the existing electricity retailing business model. Dynamic pricing is enabled by the deployment of interval metering, so we survey the current penetration of dynamic pricing plans, as well as other approaches to active demand-side participation in the wholesale market. Finally, we survey the current state of regulatory rules that allow third-party access to the distribution network.

Frank A. Wolak, Ian H. Hardman

Chapter 6. Technologies Providing Distribution Network Services

Abstract

The main benefit of interval meters is the ability to measure electricity consumption on an hourly or short-term time interval basis during the billing cycle. This allows the electricity retailer to measure and price energy flows to and from the consumer at that level of temporal granularity. A number of other features of interval meters are often offered–and at times required–in markets around the world. In this section we highlight some of the other beneficial qualities that smart meters use to modernize the grid.

Frank A. Wolak, Ian H. Hardman

Chapter 7. Possible Futures of Electricity Retailing

Abstract

This chapter characterizes the initial conditions and policy goals that are likely to drive a region’s decision to pursue a reactive versus a forward-looking approach to adapting to the new technologies impacting electricity retailing. We divide regulatory responses to these initial conditions and policy goals into three groups: (1) adaptations that should occur in all regions, (2) those that can be delayed in regions following a reactive approach, and (3) those that should be undertaken under a forward-looking approach. Because different regions have different natural resource mixes, different electricity demands, and different energy and environmental policy goals, there is no single optimal future market or regulatory structure for electricity retailing for all regions. As discussed throughout this book, an important driver of the choice between a reactive versus a forward-looking approach is the extent of deployment of interval metering technology.

Frank A. Wolak, Ian H. Hardman

Chapter 8. Retail Market Design Lessons from California and Texas

Abstract

By a large margin, California and Texas were the two states in the continental United States with the largest intermittent renewable energy shares in 2020. California had almost 14,000 MW of grid scale solar capacity and almost 6,000 MW of grid-scale wind capacity. Twenty-two percent of the energy consumed in the state came from these solar and wind resources. Texas had approximately 24,500 MW of wind capacity and 2,500 MW solar capacity and twenty-four percent of the energy consumed in the state came from these wind and solar resources. Because of their large renewable energy shares, these states are reliant on active demand-side participation in the short-term market to maintain supply and demand balance in real-time.

Frank A. Wolak, Ian H. Hardman

Chapter 9. Directions for Future Research

Abstract

Future research on the retail electricity sector should focus on several areas. These include the viability of direct load-control approaches to demand response, valuation of storage technologies and their participation in energy and ancillary services markets, spatial and temporal pricing of distribution network services, and strategies for retailers to market dynamic pricing and low-carbon energy solutions to consumers. Some of these research topics are more urgent in regions where a forward-looking approach is going to be taken. We discuss who will benefit from future research and how it can be approached in different phases and across different regions.

Frank A. Wolak, Ian H. Hardman

Backmatter

Titel: The Future of Electricity Retailing and How We Get There
verfasst von: Prof. Frank A. Wolak
Ian H. Hardman
Copyright-Jahr: 2022
Verlag: Springer International Publishing
Electronic ISBN: 978-3-030-85005-0
Print ISBN: 978-3-030-85004-3
DOI: https://doi.org/10.1007/978-3-030-85005-0