Power market regimes in European and USA
Detailed Comparison and Analysis of the Motivations and Benefits
Power markets in Europe and the United States are increasingly opened to competition. Both regimes are subject to an ever larger share of renewable energies that require additional regulations to make the system work. Despite these similar requirements, the two continents have taken different directions in implementing such markets – the independent system operator approach with nodal pricing in the US compared to zonal pricing in the EU.
The proposed project shall describe and compare the two approaches in detail. Special focus should be given on clearly defining the different stakeholders and their responsibilities, as well as on the specific motivations that have led to the current systems. The work should argue the pros and cons of each approach and propose topics where one community could learn from the other. An optimal work would simulate the two market regimes for a small toy energy system to demonstrate the key features.
The project shall be presented orally and with a final report.
Pre-requisites or requirements for the project
Good knowledge of energy economics and at least one market regime, probably the US style system, is required.
Recommended literature and preparation
- Electricity Regulation In the US: A Guide (2011), RAP – The Regulatory Assistance Project (RAP), https://www.raponline.org/wp-content/uploads/2016/05/rap-lazar-electricityregulationintheus-guide-2011-03.pdf
- FERC (Federal Energy Regulatory Commission) Energy Primer, https://www.ferc.gov/market-oversight/guide/energy-primer.pdf
- Black, J. (2013), “European Union energy regulation”, in International Regulatory Co-operation: Case Studies, Vol. 2: Canada-US Co-operation, EU Energy Regulation, Risk Assessment and Banking Supervision, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264200500-4-en
- Annual Report 2016 – Markets in the digital revolution, BUNDESNETZAGENTUR https://www.bundesnetzagentur.de/SharedDocs/Downloads/EN/BNetzA/PressSection/ReportsPublications/2017/AnnualReport2016.pdf?__blob=publicationFile&v=2
|Capacity||one or two students|
|Project available until||August 2019|