Coherence between Institutions and Technology: The case of the European Electricity Market

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Coherence between Institutions and Technology
The case of the European Electricity Market
Christof Duthaler June 12, 2009
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Technology UCTE Electricity Grid
Source UCTE
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Cross-border Electricity Flows
Source UCTE
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Institutions National TSOs and PXs
Source ETSO
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Incoherence So what?

• A complex network and volatile market is operated
  by national institutions focussing on fictitious
  constraints at political/institutional borders.

• Consequence Exploding costs and insecure network
  operation
• Inefficient dispatch of power plants
• Frequent redispatch measures required (costs
  socialized).
• Today No transparency

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Challenge ahead Wind power
Source EWEA
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Incoherence So what?

• The European Copper Plate A wrong vision for
  the European electricity market.
• Institutionally appealing (for PXs), but
  technologically (and economically) fatal.

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Aligning institutions with technology

• First Network requirements and economic benefit
• Probably in the billions of Euros per year
• Second Institutional impact
• Multi-layered governance regulation
• Case Study European Air Traffic Eurocontrol

Source PW
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• Thank you!