Published in: Energy conversion and Management

Publication year: 2008
Co-Author 1: Pierluigi Mancarella

 

Poly-generation systems for combined production of manifold energy vectors such as electricity, heat at different enthalpy levels (for instance, in the form of hot water and steam), and cooling power from a unique source of primary energy (typically natural gas) are increasingly spreading, above all on a small-scale basis (below 1 MWe), owing to their enhanced energy, environmental and economic characteristics. Availability of suitable tools for assessing the performance of such systems is therefore fundamental. In this paper, a unified general model is proposed for assessing the energy and CO2 emission performance of any type of poly-generation system with natural gas as the energy input. In particular, the classical energy saving model for cogeneration systems is extended to include in the analysis further energy vectors by defining the novel PPES (Poly-generation Primary Energy Saving) indicator. In addition, equivalent efficiencies for CO2 emission assessment are defined and used in the formulation of the new PCO2ER (Poly-generation CO2 Emission Reduction) indicator, specifically introduced for environmental analysis. The formal analogy between the PPES and the PCO2ER indicators is highlighted. Numerical applications are provided to show the effectiveness of the proposed models and to quantify the typical benefits that poly-generation systems can bring. In particular, the new indicators are of relevant interest for both energy planners and policy makers, above all in the outlook of formulating financial incentive strategies, as it already occurs for cogeneration systems, or of participating to specific energy-related markets such as the ones for trading white certificates or emission allowances.

Published in: Computers & Operations Research

Publication year: 2007
Co-Author 1: Domenico Conforti

Co-Author 2: Antonio Violi

The bilateral contract selection and bids definition constitute a strategic issue for electric energy producers that operate in competitive markets, as the liberalized electricity ones. In this paper we propose a two-stage stochastic integer programming model for the integrated optimization of power production and trading which include a specific measure accounting for risk management. We solve the model by means of a novel enumerative solution approach that exploits the particular problem structure. Finally, we report some preliminary computational experiments.

Keywords (max 10): Energy transition, distributed energy, demand management, positioning in the value chain Production / Publication year 2008 Summary / Abstract: Energy transition and subsequent changes in the configuration and dynamics in the energy value chain create challenges and opportunities for energy companies. New product and service portfolio's, a shift in geographical focus or acquisitions down or upstream in the chain, are examples of possible responses. A multidimensional approach is required to capture the oppportunies and mitigate the threats. Energy companies have to find the right balance between enhancement of their vertical postion in the value chain, horizontal expansion in different stages of this chain by for example development of new propositions in supply next to electricity and gas, and finally capturing cross-sectoral opportunities.

Keywords:
Published in:
Publication date: 2001

The Dutch Market  Surveillance Committee (MSC) has been asked by DTe to investigate market transparency in the Dutch electricity market. The Committee has based its investigation upon theoretical as well as practical considerations. The issue has been raised in meetings with representatives from agents in the Dutch electricity market, including market participants and government authorities, some of whom have also provided written input in various forms. In addition, the Committee has considered practices and experience from electricity markets in other countries, including the USA, United Kingdom and the Nordic countries.
The Committee finds, as explained in more detail below, that in the Dutch electricity market transparency is lacking in several important respects. We recommend a series of measures that should be implemented immediately, notably the regular publication of relevant information. In our view these measures are necessary, but not necessarily sufficient, to reach a satisfactory degree of market transparency. We will continually review the issue and, if warranted, propose further measures in the future.

Keywords: Tradable Green Certificates, Financial Risk, Forward Contracts
Published in: 
Publication year: 

This paper analyzes financial risks in a market for Tradable Green Certificates (TGC), both from the perspective of existing renewable producers and potential investors in new renewable electricity generation capacity. The pricing mechanism for a consumer-based TGC market with perfect competition is described. A TGC system with wind turbines as the sole technology is analyzed. In this framework production from wind turbines and TGC prices will be negatively correlated, implying that a distinction between revenue and price fluctuations is important. Finally analytical expressions for revenue-variance-minimizing trading strategies are derived and an analysis of the demand and supply for financial hedging show that forward contracts will be traded at a risk premium.

Keywords: liberalization,
Published in: Global energy business
Publication year: 2002

Because pipelines remain monopolycontrolled, end users are being denied the lower prices that competition was intended to produce. More, higher-liquidity gas hubs could be part of the solution.

Keywords: crude oil
Published in: Energy Economics
Publication year: 1999
Co-author 1: Barbara Ostdiek

We examine the effects of energy derivatives trading on the crude oil market. There is a common public and regulatory perception that derivative securities increase volatility and can have a destabilizing effect on the underlying market. Consistent with this view, we find an abnormal increase in volatility for three consecutive weeks following the introduction of NYMEX crude oil futures. While there is also evidence of a longer-term volatility increase, this is likely due to exogenous factors, such as the continuing deregulation of the energy markets. Subsequent introductions of crude oil options and derivatives on other energy commodities have no effect on crude oil volatility. We also examine the effects of derivatives trading on the depth and liquidity of the crude oil market. This analysis reveals a strong inverse relation between the open interest in crude oil futures and spot market volatility. Specifically, when open interest is greater, the volatility shock associated with a given unexpected increase in volume is much smaller.

Keywords: Market Power, Electricity Markets, Energy Modelling
Published in:
Publication year:

This paper quantifies the degree of market power in the German wholesale electricity market. A fundamental model is used to derive competitive marginal cost estimators which are compared with observed electricity prices. Marginal costs are calculated focusing on market fundamentals such as plant capacities, fuel prices, and load structures. In addition, international power exchange and dynamic effects like start-up costs and hydro storage plant dispatch are incorporated. The comparison of marginal costs and prices reveals increasing market power. While prices appear to be competitive in a first period, they are significantly above marginal costs in a second period. In addition, it is shown that market power is mainly exhibited during peak periods.

Keywords: Power Baseload, coal, fuel mix, emissions trading
Published in: World Coal
Publication year: 2004
Co-author 1: Kasper Walet

Currently, there is a lot of debate going on in the Netherlands whether the deregulation of the electricity market is actually working yes or no. The power-consuming industry believes the prices are artificially placed on a too high level and are undermining their competitiveness. It is expected that due to the upcoming CO2 emissions trading in the European Union the power prices will rise even more. With coal generally being the fuel with most CO2 emissions, emissions trading will certainly have its impact on the place of coal in the fuel mix for the power production. Surprisingly though, some large power-consumers recently announced plans to build a new coal-fired plant by themselves to undercut the power of the oligopoly of power producers in the Benelux. They believe coal is an excellent fuel for cheap baseload power generation Then maybe the prospects for coal as a fuel for power are not so bad? Kasper Walet and Cyriel de Jong of Maycroft Consultancy guide you through these issues and the impact on the coal industry.

Keywords:
Published in: Energy Risk
Publication year: 2003
Co-author 1: Kasper Walet

The Bunde-Oude natural gas hub on the German-Dutch border is the most likely candidate to become the Henry Hub of Europe, according to a survey of European natural gas experts conducted by Maycroft Consultancy Services