Showing papers on "Energy market published in 2004"

Energy Consumption in China: Past Trends and Future Directions

Abstract: In 2003 China’s energy consumption amounted to 1678 million tonnes coal equivalent (MTCE), making China the world’s second largest consumer behind only the United States. China is now also one of the largest oil importers in the world. With an economy which is expected to maintain a rate of growth of 7 to 8 per cent for decades, China’s role in the world energy market becomes increasingly influential. This makes it important to predict China’s future demand for energy. The objective of this paper is to apply the Bayesian vector autoregressive methodology to forecast China’s energy consumption and to discuss potential implications. The results of this paper suggest that total energy consumption should increase to 2173 MtCE in 2010, an annual growth rate of 3.8 per cent which is slightly slower than the average rate in the past decade. The slower growth reflects an expected slower economic growth and the decline in energy consumption due to structural changes in the Chinese economy.

Sustainable small-scale CHP technologies for buildings: the basis for multi-perspective decision-making

Abstract: Generally speaking, the concept “small-scale CHP” (combined heat and power) means combined heat and power generation systems with electrical power less than 200 kW. The significant benefit of CHP is its overall efficiency, which can be as much as 85–90%. One of the most promising targets in the application of CHP lies in energy production for buildings. The most important competing technologies in this regard are reciprocating engines, micro-turbines, Stirling engines, and fuel cells. The benefit of these technologies is their ability to utilize sustainable fuels, like regenerative biomass, which makes them attractive. In spite of many technical and economic obstacles limiting the availability and feasibility of these technologies at the moment, the literature is optimistic about their future. The breakthrough of new technology is often regarded simply as a matter of decision-making. This article is a general review of issues that can be supposed to influence decisions when considering small-scale CHP as an alternative energy source for buildings. Firstly, a brief review is presented concerning the political, economic, social, and technological environment of small-scale energy production. Obstacles limiting the market potential of the new technologies are then listed, and solutions are suggested to improve their potential in Europe’s liberalizing energy market. The relevant interest groups influencing decisions both for and against the introduction of the new technologies, as well as their status are recognized. Finally, the advantages and disadvantages of relevant small-scale CHP technologies are briefly discussed, with respect to building energy generation. Finland’s role in this study is emphasized, but the international perspective is also dealt with.

A review on the development and commercialization of biomass gasification technologies in China

Abstract: With the fast economic growth, the energy demand in China has increased two-fold in the past three decades. Various energy resources have been exploited and utilized and biomass is one of the energy resources that is abundant and has been widely used in China for a long time. Biomass gasification is an efficient and advanced technology for extracting the energy from biomass and has received increasing attention in the energy market. In this paper the development of biomass gasification for various energy applications in China is reviewed and their prospects are discussed. Among the different biomass gasification technologies, biomass gasification and power generation is found to be the most promising biomass gasification technology that has great potential to be further developed in China.

A fuzzy-optimization approach to dynamic economic dispatch considering uncertainties

Abstract: In this paper, the authors propose a fuzzy-optimization approach to dynamic economic dispatch, considering the uncertainties in deregulated energy and reserve markets. The methodology was developed from the viewpoint of a generation company wishing to maximize its own profit and to hedge its risks as a participant in the energy market and 10-min spinning reserve market. The uncertainties in the current paper were represented with fuzzy numbers, and consist of the demand and reserves required in each market, prices cleared in each market, and the probability that reserves are called upon in actual operation. The energy and reserve markets were coordinated by the generator ramp rate limits. The optimal amounts of power and reserve were determined by solving the optimization problem. Two reserve payment methods, payment for power delivered and payment for reserve allocated, were investigated in this paper.

Method and apparatus for trading energy commitments

Abstract: The present invention comprises a method, and corresponding system, apparatus and memory for trading energy commitments to reduce or increase energy demand (a demand response commitment), to increase or reduce energy production (a supply response commitment) upon demand or to deliver or to not deliver energy (an energy delivery commitment). Such commitments are made available by energy consumers, energy generators and energy delivery companies, respectively, to an entity that provides consideration for these energy commitments and trades them as fungible commodities to energy market participants. In one embodiment, the present invention comprises a method for trading energy commitments to reduce or increase energy consumption, to increase or reduce energy generation, or to deliver energy, comprising receiving a plurality of multi-year energy commitments; providing consideration for each of the multi-year energy commitments; and trading at least one of the plurality of energy commitments upon demand.

Eirik Lund Sagen and Finn Roar Aune The Future European Natural Gas Market - are lower gas prices attainable?

Abstract: We analyse effects of various natural gas supply scenarios in a liberalised Western European energy market in 2010. Our starting point is the uncertainties about future natural gas exports from Russia and LNG-producing countries. Our results indicate that the average natural gas producer price in Western Europe is likely to be higher in 2010 than the average historical price the last 15 years, even in an optimistic supply scenario. We find only modest effects on both average natural gas producer prices and trade patterns of radical changes in supply volumes. However, there are significant country specific differences, primarily related to the reliance on Russian gas exports and the use of gas fired power generation

State of the art of the virtual utility: the smart distributed generation network

Abstract: The world of energy has lately experienced a revolution, and new rules are being defined. The climate change produced by the greenhouse gases, the inefficiency of the energy system or the lack of power supply infrastructure in most of the poor countries, the liberalization of the energy market and the development of new technologies in the field of distributed generation (DG) are the key factors of this revolution. It seems clear that the solution at the moment is the DG. The advantage of DG is the energy generation close to the demand point. It means that DG can lower costs, reduce emissions, or expand the energy options of the consumers. DG may add redundancy that increases grid security even while powering emergency lighting or other critical systems and reduces power losses in the electricity distribution. After the development of the different DG and high efficiency technologies, such as co-generation and tri-generation, the next step in the DG world is the interconnection of different small distributed generation facilities which act together in a DG network as a large power plant controlled by a centralized energy management system (EMS). The main aim of the EMS is to reach the targets of low emissions and high efficiency. The EMS gives priority to renewable energy sources instead of the use of fossil fuels. This new concept of energy infrastructure is referred to as virtual utility (VU). The VU can be defined as a new model of energy infrastructure which consists of integrating different kind of distributed generation utilities in an energy (electricity and heat) generation network controlled by a central energy management system (EMS). The electricity production in the network is subordinated to the heat necessity of every user. The thermal energy is consumed on site; the electricity is generated and distributed in the entire network. The network is composed of one centralized control with the EMS and different clusters of distributed generation utilities and heat storage tanks. Each of these clusters is controlled by a local management station (LMS). Every LMS has information about the requirements (heat, cold and electricity) of the users connected to its cluster and the state of the utilities and water level of the storage tanks in its cluster. The EMS receives the information from the LMSs and sets the electricity input or output of every cluster in the network. With the information ordered by the EMS, the LMS set the run or stand-by of the utilities of its cluster. The benefits of the VU are the optimization of the utilization yield of the whole network, the high reliability of the electricity production, the complete control of the network for achieving the main aim of the EMS, the high velocity for assuming quick changes in the demand of the system and high integration of renewable energy sources, plus the advantages of the DG. This paper indicates the state of the art of the VU concept, analyses the projects that are being developed in this field and considers the future of the VU concept. Copyright © 2004 John Wiley & Sons, Ltd.

The Future European natural gas market - are lower gas prices attainable?

Abstract: We analyse effects of various natural gas supply scenarios in a liberalised Western European energy market in 2010. Our starting point is the uncertainties about future natural gas exports from Russia and LNG-producing countries. Our results indicate that the average natural gas producer price in Western Europe is likely to be higher in 2010 than the average historical price the last 15 years, even in an optimistic supply scenario. We find only modest effects on both average natural gas producer prices and trade patterns of radical changes in supply volumes. However, there are significant country specific differences, primarily related to the reliance on Russian gas exports and the use of gas fired power generation

Simulating price responsive distributed resources

Abstract: Distributed energy resources (DER) include distributed generation, storage, and responsive demand. The integration of DER into the power system control framework is part of the evolutionary advances that allow these resources to actively participate in the energy balance equation. Price can provide a powerful signal for independent decision-making in distributed control strategies. To study the impact of price responsive DER on the electric power system requires generation and load models that can capture the dynamic coupling between the energy market and the physical operation of the power system in appropriate time frames. This paper presents modeling approaches for simulating electricity market price responsive DER, and introduces a statistical mechanics approach to modeling the aggregated response of a transformed electric system of pervasive, transacting DER.

Energy advisory and transaction management services for self-serving retail electricity providers

Abstract: Methods for assisting and enabling a large industrial or business consumer of energy to become a self-serving retail electricity provider in a deregulated energy market. Performed by an energy advisory and transaction management service provider, one method registers the large business energy consumer with the state public utility commission, assists the business to qualify as a scheduling entity with an independent service operator, and establishes the business as a bilateral trading partner of wholesale energy merchants. In another method, the business processing outsourcing service assists the business in energy purchasing and risk management decisions by forecasting zonal load requirements for the business. A price forecasting analysis is compared with supply offers from wholesale energy merchants and bilateral transactions for energy supply are brokered between the business and the wholesale energy merchants. In another method, the business process outsourcing service assists the business to manage electronic transactions with an independent service operator and a transmission and distribution service provider. A daily load forecast for the business is updated and compared with energy purchase commitments to identify imbalances between supply and demand. The outsourcing service submits a daily schedule of forecasted sub-hourly load and purchase and sale commitments to the independent system operator. The outsourcing service receives and processes invoices from market participants and generates financial settlement reports for the business.

Market based transmission planning considering reliability and economic performances

Abstract: Growth in electricity demand and new generation, a lack of investment in new transmission facilities, and the incomplete transition to fully efficient and competitive wholesale markets, have allowed transmission bottlenecks to emerge. Proper transmission expansion is necessary to insure adequate reliability as well as to relieve system congestion. This paper presents a transmission planning approach to evaluate the reliability impact as well as economic impact under the competitive energy market. Unavailability of generating units and transmission facilities is considered in market simulations to assess the overall performance of transmission expansion projects. Effects of transmission congestion and interface capacity improvement are discussed through a real regional electric market simulation analysis of the NYCA system based on publicly available transmission, generation, and demand data.

A stochastic game approach for modeling wholesale energy bidding in deregulated power markets

Abstract: It has been noted in a recent report (Dec. 2002) from the General Accounting Office of the U.S. that "various design flaws in wholesale markets and transmission services have created operational problems within and between wholesale markets." This paper presents a novel methodology to analyze and design the wholesale energy bidding aspect of a deregulated power market. We adopt a system-wide approach that considers many of the relevant features including transmission congestion. We develop a two-stage model: 1) a nonzero sum stochastic game with average reward for the wholesale energy market operation, and 2) a nonlinear programming (NLP) model for the unit-commitment (UC) and the optimal power-flow aspects. The solution approach for the two-stage model is based on a reinforcement-learning (RL) algorithm, which is designed to obtain Nash equilibrium policies. We use a three-retailer/three-supplier power network with and without congestion to test and benchmark our methodology.

Market-based Options for Security of Energy Supply

Abstract: Energy market liberalization and international economic interdependence have affected governments' ability to react to security of supply challenges. On the other side, whereas in the past security of supply was largely seen as a national responsibility, the frame of reference has increasingly become the EU in which liberation increases security of supply mainly by increasing the number of markets participants and improving the flexibility of energy systems. In this logic, security of supply becomes a risk management strategy with a strong inclination towards cost effectiveness, involving both the supply and the demand side. Security of supply has two major components that interrelate: cost and risk. This paper focus the attention on costs in the attempt to develop a market compatible approach geared towards security of supply.

Emission constraints on short-term schedule of thermal units

Abstract: This paper is about environmental protection of our habitat in what regards limiting the pollutant emission due to thermal power plants, burning fossil fuels, burning coal, oil or gas to convert into electric energy. On the one hand, within the liberalized energy power markets, schedule of thermal power plants has evolved from a point of view optimisation problem of electric companies to a market level problem. On the other hand, as a consequence of growing environmental concern, the impact of conventional power plants on the environment is being considered and efforts are being made to limit this impact. Consequently, the short-term schedule for thermal power plants needs to be not only considered within the energy market, but also within preserving healthy conditions and self recovery cycles in the environment. We present a case study for thermal power plants considering pollutant emissions and compare the results with the usual approach, ignoring pollutant emissions.

Sensor/actuator networks supporting agents for distributed energy management

Abstract: We have demonstrated the use of low-cost sensing devices for intelligent control of typical commercial energy loads: cool rooms for keeping produce fresh and heating, ventilation, and air-conditioning (HVAC) systems for buildings. We provide the sensing devices - Berkeley Motes and X10 sensing and switching equipment - with a presence on the Internet to permit sophisticated applications to access their data and control their electrical loads. The ad hoc sensor network is connected to the mobile phone network through a light-weight gateway for long-haul communications. Local control provides failsafe default behaviour in the absence of remote control or when communication is lost. We propose to use this network to deploy agent-based software to manage distributed energy resources, including local generation plants as well as loads. Our aim is to provide new ways for small-to-medium enterprises, energy retailers, and energy network businesses to obtain commercial benefits in a deregulated energy market.

Mismeasuring Electricity Market Power

Abstract: By studying average variable costs, researchers examining the California energy crisis were sure to find examples of market power - even if that power may not have existed. By studying average variable costs, researchers examining the California energy crisis were sure to find examples of market power - even if that power may not have existed. The approach taken in most empirical analyses of market power in electricity rests on a flawed application of a standard measure of market power: the fraction of a good's price exceeding its marginal production cost (known as the Lerner index or the price-cost margin). The flaw in those electricity market studies is not that the price-cost margin is theoretically inappropriate, but that it is inappropriately implemented. The proxy for "marginal cost" used to estimate price-cost margins is typically the average variable or operating cost of the last generator that would be dispatched to meet energy demand. The need to recover fixed costs can lead to prices substantially above average variable costs in peak periods. Real-world "noise" in the form of uncertainty regarding demand and supply shocks (e.g., unanticipated hot weather, generator outages) could lead to patterns of market bids that fail the average variable cost test without necessarily indicating market power.

DOE FE Distributed Generation Program

Abstract: The U.S. Department of Energy’s (DOE) Office of Fossil Energy’s (FE) National Energy Technology Laboratory (NETL), in partnership with private industries, is leading the development and demonstration of high efficiency solid oxide fuel cells (SOFCs) and fuel cell turbine hybrid power generation systems for near term distributed generation (DG) market with emphasis on premium power and high reliability. NETL is partnering with Pacific Northwest National Laboratory (PNNL) in developing new directions in research under the Solid-State Energy Conversion Alliance (SECA) initiative for the development and commercialization of modular, low cost, and fuel flexible SOFC systems. The SECA initiative, through advanced materials, processing and system integration research and development will bring the fuel cell cost to $400/kilowatt (kW) for stationary and auxiliary power unit (APU) markets. The use of fuel cells is expected to bring about the hydrogen economy. FutureGen is a major new Presidential initiative to produce hydrogen from coal. Solid State Energy Conversion Alliance The SECA Program is the main thrust of the DOE FE DG Fuel Cell Program. SECA is also recognized as part of the Hydrogen Program. Achieving the SECA goals should result in the wide deployment of the SOFC technology in large high volume markets. This means benefits to the nation are large and cost is low, which is the SECA goal. Less expensive materials, simple stack and system design, and high volume markets are the three criteria that must be met by a fuel cell system to compete in today’s energy market. Near zero emissions, fuel flexibility, modularity, high efficiency, simple CO2 capture will provide a national payoff that gets bigger as these markets get larger. The SECA program is dedicated to developing innovative, effective, low-cost ways to commercialize SOFCs. The program is designed to move fuel cells out of limited niche markets into widespread market applications by making them available at a cost of $400 per kilowatt or less through the mass customization of common modules. SECA fuel cells will operate on today’s conventional fuels such as natural gas, diesel, as well as coal, gas, and hydrogen, the fuel of tomorrow. The program will provide a bridge to the hydrogen economy beginning with the introduction of SECA fuel cells for stationary (both central generation and distributed energy) and auxiliary power applications. The SECA program is currently structured to include competing industry teams supported by a crosscutting core technology program. SECA has six industry teams working on designs that can be massproduced at costs that are ten-fold less than current costs. The SECA core technology program is made up of researchers from industry suppliers and manufacturers as well as from universities and national laboratories all working towards addressing key science and technology gaps to provide breakthrough solutions to critical issues facing SECA. Delphi, in partnership with Battelle, is developing a 5 kW, planar, 700 °C – 800 °C, anode supported SOFC compact unit for the DG and APU markets. Delphi is expert at system integration and high volume manufacturing and cost reduction. They are focused on making a very compact and light weight system suitable for auxiliary power in transportation applications. General Electric is

Joint Energy and Reserves Auction with Opportunity Cost Payment for Reserves

Abstract: System operators in the electricity industry are required to procure reserve capacity to deal with unanticipated outages, demand shocks, and transmission constraints. One traditional method of procuring reserves is through a separate capacity auction with two-part bids. We analyze an alternative scheme whereby reserves are procured through the energy market using only energy bids, and capacity payments are made based on a generator's implied opportunity cost. By using the revelation principle, we are able to derive the equilibrium bidding function in this market and show that generators have a clear incentive to understate their costs in order to capture higher capacity rents. We then show that in spite of making energy payments based on the marginally procured unit, the expected energy costs under our scheme are bounded by that of a disjoint auction. We then give a numerical example for a special case of uniform demand distributions.

New real time market applications at the California independent system operator (CAISO)

Abstract: This paper describes the operation of the new realtime energy market at CAISO. The new real-time market utilizes the security constrained unit commitment (SCUC) and security constrained economic dispatch (SCED) programs to optimally determine resource commitments and dispatch schedules while observing resource and system real-time constraints [AI Cohen, et al., 1999]. The SCED calculates three prices: the dispatch interval ex-post market clearing price (MCP) and two weighted-average prices based on the dispatch interval ex-post MCP. This paper describes the scheduling activities of the CAISO new realtime market followed by the major scheduling applications. The scheduling market timeline and scheduling application interfaces are also described.

Examples of successful architectural integration of PV: Australia

Abstract: An abundance of solar energy resources in Australia and the application of remote area power systems (RAPS) are well known. Numerous locations, isolated from the electricity grid have benefited from photovoltaic energy supply with economic justification and provided a platform from which the scientific knowledge and expertise has grown over 30 years. Of current global relevance is the transition and growth of photovoltaic applications in the urban environment through building-integrated PV (BiPV) and its use as a clever building material. Energy market dynamics in Australia and low-priced fossil fuels limit the present market potential for BiPV. Showcase projects and government programmes have provided the much needed impetus to develop and introduce BiPV products to the building industry and, importantly, experiment with architectural design solutions that strive to offer added benefits to the built environment. This paper discusses examples of successful integration of PV and lessons learnt in the process. The importance of high ambient temperature conditions, thermal performance and smart electrical configurations to minimise shading influences, are considered to be particularly relevant. Copyright © 2004 John Wiley & Sons, Ltd.

World Bank framework for development of regional energy trade in South East Europe

Abstract: This Bank framework is motivated by the Athens Memorandum establishing a South East Europe Regional Energy Market (SEEREM). The aim is to outline challenges for successful SEEREM implementation, and to define a supporting role for the World Bank. The framework highlights risks, and provides risk mitigation strategies, related to the following: institutional reform to support power market liberalization; power market design; technical capacity to support market development (i.e. power generation and transmission capacity); South East Europe (SEE) gasification; environmental compliance costs; power market liberalization impacts on the SEE coal industry. Five key proposals in the framework are for the Bank to: support a phased approach to market opening, starting with trading based on bilateral contracts and third party network access, moving to a more sophisticated model only after the institutional framework is sufficiently developed; use regional benchmarking in its policy support work with individual countries and as a trigger for investment financing; use a special instrument for finance of investments to support development of the regional market; support work to assess the economics of SEE gasification and costs of compliance with EU environmental standards; complete a regional power Generation Investment Study.

Process Industry Energy Projects in a Climate Change Conscious Economy

Abstract: Most industrial process plants consume large amounts of energy (usually in the form of steam and electricity) to produce demanded goods, such as beer or paper. However, combustion of fossil fuels has negative external effects on the Earth’s climate. In a climate change conscious economy such externalities can be addressed through incentive-based policy instruments. As a result, fossil fuel prices can be expected to increase, as well as prices for electricity and climate change neutral fuels such as biofuel. Many studies have shown the substantial potential for energy savings in process plants. Most process plants are energy market actors as a result of e.g. on-site electricity cogeneration, delivery of excess heat to district heating networks, or trading on emerging biofuel markets. Thus, energy projects at process plants will be affected by climate policy. This thesis addresses the issue of evaluating process industry energy projects given an uncertain, but climate conscious, development of the energy market. The perspective of industrial decision-making applies primarily. The main emphasis is put on development of analysis methods and tools, including classification of influencing parameters, systematic energy market scenario approaches, system boundary considerations, cost-effectiveness graphical tools for CO2 reduction assessment, and a biofuel price-setting model adopting a constant electricity-to-biofuel price ratio for the Nordic countries. The thesis includes several applied studies conducted considering the Nordic energy market and its assumed climate conscious future development. The results show that energy projects in process plants can be cost-competitive compared to other measures for reducing CO2 emissions in the Nordic countries. The results for specific studies of pulp mill energy systems indicate that biofuel saving measures in pulp mills are both economically competitive and robust and thus entail only a small risk with respect to uncertain development of future climate policy. It should, however, be noted that total CO2 emissions associated with pulp mill biofuel savings may increase or decrease depending on the future development of the Nordic energy market. For industrial combined heat and power (CHP) the results are complex. The applied studies illustrate the importance of choice of emissions baseline for electricity and/or biofuel usage for determining the total CO2 emissions consequences of energy projects.

Power distribution system

Abstract: A local electricity distribution network (1) comprising a local transmission hub (13) and plurality of units (12a, 12b) arranged to selectively import and export electricity from and to the hub (13), the hub in turn being arranged to selectively import and export electricity from and to an external grid (20). The individual units (12a, 12b) decide if they are to export or import energy to or from the local transmission hub (13) based on information relating to the energy market received from the local hub. In the same way the local hub decides if it is to export or import energy to or from the external grid (20) based on energy market information received from the external grid.

Towards developing a competitive market for regional electricity cross border trading: the case of the Southern African power pool

Abstract: Regional electricity cross border trading is governed by fixed co-operative bilateral agreements, generally of a long-term duration. The fixed power purchase agreements provide for the assurance of security of supply but are not flexible to accommodate varying demand profiles and varying prices. The pricing of electrical energy defers for periods of peak and off peak consumption. To explore further the benefits thereof, the sourcing and scheduling of electrical energy closer to the time of dispatch was investigated. Research has shown that competitive bidding is one option for sourcing and securing supplies closer to real time dispatch. Using the experiences of the Southern African power pool (SAPP) as a case study, a competitive market framework for cross border electrical energy trading was developed. In April 2001, the market commenced trading with a few participants. With increasing participants and market confidence, the results of the first two years show that the model is robust and is a recommended framework for cross border short term electrical energy trading. The short-term energy market (STEM); designed to be day-ahead, compliments the bilateral market and provides another technique for the pricing of electrical energy. With the addition of real time communications and energy management systems, the spot market for competitive bidding is the next step.

Overview of PJM energy market design, operation and experience

Abstract: This panel paper outlines the PJM energy market design, operation and experience. The PJM energy market consists of two markets, a day-ahead market and a real-time balancing market. The LMP is used to calculate charges or credits for delivering PJM market services including the spot market energy, the transmission congestion, etc. The fundamental features of the PJM energy market are described. The design of fundamental features ensure that the market is robust and competitive, the market mechanisms promote liquidity in the markets and the market economic incentives drive the convergence of the day-ahead and real-time market prices. The LMP-based markets support reliable grid operations through efficient price signals.

Russia's Oil Potential: Prospects and Implications

Abstract: Since the late 1990s, Russia's oil production has experienced a steady resurgence. As a result, Moscow has regained its status as a major oil producer, exporter and crucial player in global energy markets. This paper argues that this rising Russian role should neither be overestimated nor underestimated. It examines some of the main characteristics of the country's oil industry, notably the investment climate, production-sharing agreement regime and pipeline capacity. Russia's rising production is likely to enhance global energy security. Moscow and other major oil producers share a similar goal - stability of the oil market and international economy. Today's energy market should not be analysed in zero-sum terms. Major oil producers coordinate their policy with each other and with major consumers.