Investment, Unbundling, and Vertical Governance in Electric Power Systems

  • Abstract Unbundling, the vertical separation of electricity networks from generation and retail, and liberalization have been common features of electricity market reform around the world. As a consequence, the structure of electric power systems is becoming increasingly decentralized. Electricity supply is an interrelated system that requires careful coordination between supply and demand. This applies especially to system operation. But also in the long term coordination exhibits considerable benefit since the siting of generators has considerable influence on the network and may defer/ or increase investment need. With unbundling, firm-internal coordination across the entire supply chain is no longer possible. Coordination problems can arise because of lacking information or because of incentive problems. Since lack of coordination can cause efficiency losses, alternative governance mechanisms are needed to restore coordination in a market environment. This PhD thesis explores the coordination problem and possible solutions in five related articles. The first paper focuses on operational coordination and analyses the option of an independent system operator as a governance form for future actively managed smart distribution networks. The second paper examines whether costless information exchange ("cheap talk") can achieve coordination of investment decisions. Cheap talk may fail because of incentives problems. However, deep charging can serve to restore incentive compatibility. The third paper studies locational charging as price mechanism to coordinate distribution network and network users analytically. The fourth paper extends the theoretical analysis with a more in-depth investigation of the possibilities for locational pricing in Germany based on contractual solutions between network operator and user. The fifth paper shows that such optional and voluntary contracts can achieve a pareto-improvement.

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Publishing Institution:IRC-Library, Information Resource Center der Jacobs University Bremen
Granting Institution:Jacobs Univ.
Author:Nele Friedrichsen
Referee:Brunekreeft Gert, Marco Verweij, Rolf K√ľnneke
Advisor:Brunekreeft Gert
Persistent Identifier (URN):urn:nbn:de:101:1-2012010913932
Document Type:PhD Thesis
Language:English
Date of Successful Oral Defense:2011/12/19
Date of First Publication:2011/12/22
PhD Degree:Economics
School:SHSS School of Humanities and Social Sciences
Other Countries Involved:The Netherlands
Other Organisations Involved:Bremer Energie Institut
Library of Congress Classification:H Social Sciences / HD Industries. Land use. Labor [incl. Management] / HD28-70 Management. Industrial management / HD30.19-30.29 Theory. Method. Relation to other subjects / HD30.22 Managerial economics
Call No:Thesis 2011/44

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