Tag Archives: electricity

Sustainable Energy – Without the Hot Air – David J.C. MacKay

This heated (environmental) debate is fundamentally about numbers. How much energy could each source deliver, at what economic and social cost, and with what risks? But actual numbers are rarely mentioned. In public debates, people just say “Nuclear is a money pit” or “We have a huge amount of wave and wind.” The trouble with this sort of language is that it’s not sufficient to know that something is huge: we need to know how the one “huge” compares with another “huge,” namely our huge energy consumption. To make this comparison, we need numbers, not adjectives.

The book tries to quantitatively check how a world driven by renewable energy would like. The calculations look at possibilities, how much we can produce, compared with how much we consume, in terms of kW, ignoring the costs of technologies and deployment. Only if the numbers add up is checked.

The research is divided into three parts. First part is taking different classes of consumption and production and stacks them into two columns, seeing how the numbers look like, The second part explores scenarios involving various deployments of renewable electricity technologies or carbon reduction. Finally, the third part presents the technical analysis behind the numbers presented.

The analysis focuses on the United Kingdom, investigating how much the country can produce in terms of renewable electricity and looking at different scenarios, including imports for more renewable-potent neighbours.

The investigation by David MacKey is looking at the key problems of energy sustainability, checking real energy consumption, not only electricity, but including for example transport, products we buy and agriculture.

Although feeling a bit dated sometimes, Sustainable Energy, first published in 2008, still brings insightful findings. It is one the most, if not the most comprehensive analysis of how realistic a renewable future is.

Unfortunately, David MacKey passed away in 2016, but his superb analysis remains. He was Professor of Physics at the University of Cambridge.

I recommend the first part of the book to everyone interested in energy, while the third part is really for only those really into the topic.

This is the first book I post which was read on my new e-reader.

Energy and Civilization: A History – Vaclav Smil

Despite many differences in agronomic practices and in cultivated crops, all traditional agricultures shared the same energetic foundation. They were powered by the photosynthetic conversion of solar radiation, producing food for people, feed for animals, recycled wastes for the replenishment of soil fertility, and fuels for smelting the metals needed to make simple farm tools.

The books from Vaclav Smil are a trove of knowledge on energy evolution. This book discusses the evolution of human energy advances over time, from agriculture to weapons.

The book reads more as an academic article, with a plethora of references and sources. One sixth of the book is just references. Very dense in knowledge and explanations, it overwhelms the reader with the sheer depth of analysis.

Smil tries to use largely a single energy unit, joules, to measure everything, from the various techniques to harness animals to work to the different ways to pass water through the watermills. The purpose is to quantify the evolution of human energy efficiency over time.

The book is encyclopedic in its depth and range, truly a history. The book dryness of writing and data is broken by very informative and engaging boxes, explaining various facts and developments.

The only downside is the grammar errors found here and there sometimes.

I was impressed by the precision and correct analysis of energy sources and transformations, missed by many pundits.

Also impressive is the general neutral tone regarding various sources that the author manages to impose.

Overall, an incredible book, THE book on energy history.

Bidding Zones analysis – group project

Below my group project on Bidding zones for the EU Electricity ‎Network Codes course.

Do you think that the changes made by the Clean Energy Package to the bidding zone review procedure will lead to different results or create more challenges?

The newly-adopted Electricity Regulation (ER), article 14.1, states that “[…] Bidding zone borders shall be based on long-term, structural congestions in the transmission network. Bidding zones shall not contain such structural congestions unless they have no impact on neighbouring bidding zones […]”. EU TSOs and NRAs are mandated by the Capacity Allocation and Congestion Management Guideline (CACM GL) and ER to assess on a regular basis the existing bidding zones (BZ) configuration, and possibly initiate its review and reconfiguration.

A BZ review was voluntary under the CACM GL (article 32.1), but became compulsory under the ER (article 14.3). Under CACM GL, the review should include scenarios that take into account “likely” infrastructure developments within the following ten years (article 33.1), while the methodology required by the ER should be based on structural congestions that were not expected to be overcome (e.g. due to grid expansion) within three years (article 14.5). The ER obliged the TSOs to present a BZ methodology by October 2019 (article 14.5), and the all TSOs proposal was submitted on 7 October 2019. It includes one annex per region presenting the alternative BZ configurations that will be compared to the status-quo during the review.

According to the ER, the relevant regulatory authorities shall take a unanimous decision on the TSOs proposal by January 2020. If unanimity is not reached, ACER shall decide on the methodology and alternative BZ configurations, by April 2020 latest. Once the methodology has been decided, the TSOs of each region have one year to submit a proposal to amend or maintain the bidding zone configuration, based on the results of the review. The proposal comes on the table of the concerned NRAs for approval. If unanimity is not reached, the European Commission has the final say on maintaining or amending the current BZ configuration.

The puzzle is whether the TSOs’ methodology proposal is able to identify structural congestions. Via art. 16(8) ER, it can be interpreted that a Member State (MS) suffers from structural congestion if it doesn’t comply with the 70% minRAM clause. If this is the case, the MS has two options: establish a (multi)national action plan or amend its BZ. There are two BZ configuration principles. Firstly, the BZ should be constructed independent of political borders, but built around structural congestions. Secondly, the size of a BZ should be a fine balance between structural congestions and market liquidity and competitiveness.

The main opportunities and challenges arising from the changes introduced by the CEP are summarized below:


  • The 70% minRAM clause of article 16(8) offers an opportunity for a willing TSO and a MS to change the configuration of a BZ.
  • Splitting BZs may be politically sensitive at the national level, so putting ACER and the European Commission in charge of final decisions may break local interests and put the interest of the EU market as a whole ahead of national interests.
  • A process for amending BZ is now relatively clearly defined, allowing MS the possibility to create and follow action plans. The clarification was important, as the first BZ review was not successful. Action plans offer MS more time, but multiple opportunities have been built into the procedure to revert from an action plan to deciding on a BZ reconfiguration.


  • At the center of the BZ review process lies the identification of a structural congestion. Thus, this should be the first step of the process. However, TSOs must already propose alternative BZ configurations, even if no methodology has been developed to identify structural congestions. In this context, it is not surprising that in the annex many TSOs argue that they don’t propose a BZ alternative because their country doesn’t suffer from structural congestion (see table in annex at the end of this paper). In this context, the whole process already stops at the first step.
  • The attempt to define structural congestion based on the 70% minRAM clause has also severe limitations. Differences in interpretation can be observed (not only across MS but also different stakeholders) and it is in the NRAs’ responsibility to check for compliance. Consequently, it doesn’t appear as an appropriate tool to pressure MS suffering from structural congestion to amend their BZ.
  • Additionally, it solely gives arguments for splits and not for mergers of BZs which could be beneficial from a market liquidity and competitiveness perspective. This is obvious from reading the annexes of the all TSOs proposal, where almost only arguments against or in favor of splits are listed.
  • As stated above, if the NRAs don’t come to an agreement concerning which BZ configurations should be evaluated, ACER will take the final decision. In relation with the complexity of the situation, in particular in the central EU region, questions can be raised concerning the competences, e.g. in simulation, needed for taking such decision. Any decision not well argued or missing consistency could be raised in court.


The BZ reconfiguration is a necessary step towards solving several present and future congestions, in addition to requesting TSOs to offer more capacity to the market. The ER, part of the Clean Energy Package, was a natural opportunity to develop such a plan. A rather clear and agreed methodology, follow-up steps and backup solutions are all foreseen in the ER.

However, there are a number of drawbacks, such as the bias towards splitting BZ in the BZ reconfiguration, instead of merging them as well. The procedure for identifying structural congestions is possibly flawed, as TSOs must propose alternative BZ configurations in parallel with developing a methodology that must be approved by regulators. In addition, connecting BZ configurations to the 70% clause with all of its limitations (diverse interpretations, in/sufficient data availability, etc.) and action plans does not contribute to its implementation, but it is watering down the process. Furthermore, leaving European institutions as ultimate decision-makers, might look as a solution but it remains to be seen if it will be fit for purpose due to the dominantly political nature of the process.

Blackout – Marc Elsberg

When the lights go out one night, no one panics. Not yet. The lights always come back on soon, don’t they? Surely it’s a glitch, a storm, a malfunction. But something seems strange about this night. Across Europe, controllers watch in disbelief as electrical grids collapse. There is no power, anywhere.
A former hacker and activist, Piero investigates a possible cause of the disaster. The authorities don’t believe him, and he soon becomes a prime suspect himself. With the United States now also at risk, Piero goes on the run with Lauren Shannon, a young American CNN reporter based in Paris, desperate to uncover who is behind the attacks. After all, the power doesn’t just keep the lights on―it keeps us alive.

The book is a dystopian thriller starting from a cyber attack on the EU electricity grid. The protagonist, an Italian IT specialist, tries to solve the crisis by finding how the system was affected and going to authorities. The pace of the book is fast, by quickly changing the locations.

The premise of the book is jaw-dropping: a EU-wide electricity blackout. The Austrian author carefully researched the subject and the potential outcomes of such a crisis. The book is full of  excellent logical consequences of such an event.

What if the electricity grid collapses?

However, the quality of the writing itself is not great. The translation from German is not perfect and there is too much said and too little shown. There are also some plot holes, the solution focusing too much on individual characters, while in reality there is more of a team work.

I really enjoyed the book, despite its drawbacks. A great analysis showing the vulnerabilities of a vital system, our electricity.

PROMO: Energy MBA in Bucharest

The MBA in Energy at the Academy of Economic Studies (ASE) in Bucharest starts the registrations for prospective candidates between 23-25 July 2018.

Organized by the Faculty of Business Administration in Foreign Languages (FABIZ), the Energy Master is the best in Romania and is done in collaboration with representatives of the energy business environment (OMV Petrom, Siemens, CEZ, Electrica, Transgaz etc.).

Join the new challenges and be a part of the Energy Business!

The programme is open to all bachelor degree graduates, but candidates need one year experience in energy. Of course, a good command of English is required, as it is taught in English.

It is a flexible MBA, held during weekends, for 4 semesters. The courses range from “EU Policy in Energy” to “Energy Trading”. The professors and experts’ team is excellent, including one of Romania’s best energy professionals, Corina Popescu.

Please find below the brochure of the programme.


More information also at the following link: mba-energie.ase.ro.

Coal: A Human History – Barbara Freese

Some saw in the mines scientific proof of biblical flood. Some credited coal with protecting people from the bubonic plague; others accused it of promoting baldness, tooth decay, sordid murders, caustic speech and fuzzy thinking.More recently many of us believed we could burn vast amounts of coal without disrupting the natural balance of the planet. No doubt we have still much to learn about coal, but at least we’ve been able to dispel many of the old myths.

The book talks about the history of coal, since Roman times to modern day. Barbara Freese talks about both the good and the bad sides of the mineral. As the author is an environmental lawyer, the book slightly tips on the bad side of coal, however the research is deep, insightful and entertaining.

Coal is appreciated by Ms Freese as the basis of the Industrial revolution and the rock that made the British Empire and the United States. It significantly improved living standards by increasing on a massive scale the efficiency of industrial processes.

On the other side, the bad environmental effects were constant, from the fumes and hard working conditions to current greenhouse gas problems.

The message of the book is that coal was never popular, but always useful. The author finishes the book on a positive note, such as using coal for in plastics and other alternative uses.

How the electricity system works

The electricity market – a very peculiar market

Economic interactions regarding electricity are designed as a market, like any other commodity. Therefore electricity prices follow demand and supply rules. However, they have some very specific characteristics, at consumer level.

Firstly, demand is relatively inelastic in the short-term, particularly for small consumers, less so for large ones. Secondly, there is limited customer storage options. While there is the option of batteries for small consumers, the storage capability is small (Tesla Powerwalls, for example, have a storage of 7kWh and a power of 2kWh; while average daily household consumption in the UK is about 11kWh). This limits significantly consumers’ response to price fluctuations. Thirdly, consumers have limited if any, substitutes for electricity. They can invest in long term demand-response measures (for example, investing in more energy-efficient appliances), but the basic need for the product remains. Fourthly, the entire society is based on electricity as energy carrier. The use of electricity cannot be avoided by consumers. Because of very inflexible demand and limited storage options, the supply has to match and follow the demand at all times. Various ways to organize the electricity market were used, reflecting competing public policies, for example non-for-profit utilities or regulated monopolies. Electricity markets have retail and wholesale markets. Retail markets involve the sale of electricity to end consumers, while wholesale markets involve the selling of electricity to distributors by electric utilities.

How wholesale electricity markets work

The wholesale market is where the commodity, electricity, is traded (bought and sold) by the electricity producers, the electricity suppliers (who subsequently sell it to end consumers) and brokers or traders. Trading can be via direct agreement – directly between producer and supplier, via broker – brokered mutual agreement, or on electricity stock exchanges.

On electricity stock exchanges (also called power exchanges), like any other stock exchanges, transactions may be either financial (speculating for a better price) or may lead to a physical supply. Products can be spot (purchased for delivery on the same day or following day) or forward products (purchased for delivery sometime in the future). This is very similar to any stock exchange, with the exception that the market did not evolve yet to derivative products.

A particularity of the power exchange is that the commodity follows consumption patterns, so the products can also be base (the minimum consumption of electricity) or peak (supply from 8 morning until 20 from Monday to Friday). Finally, spot products can be day-ahead, weekend or hourly-reference products (half an hour, an hour or blocks of several hours). Therefore, a product sold on the exchange can be, for example, base spot or forward weekend. Key is the day-ahead spot price because it is the reference price for the spot trade.

The power of the regulating authority, usually the Transmission System Operator, on power exchanges is significant, because it has the ultimate responsibility to keep the system in balance. Because the electricity system has to be in balance at all times, the grid manager can take balancing actions, procuring more electricity, stopping someone to supply or asking large consumers to limit usage.

The merit order

A model often used by traders and brokers on electricity markets to describe the electricity generators, their production and costs is the merit order. This ranks power generators (mostly power stations and wind farms) by increasingly short-run marginal costs of production and capacity. Power generators with costs below the demand curve (also known as electricity load) will produce, while those above load will wait for a peak. The last power generator “called” to fill the needed load “sets” the price.

While the model has its limits, such as ignoring energy storage and ramp rates, it still shows that electricity produced by the plants with the lowest cost is dispatched first, minimizing the cost for consumers. The difference between the dispatched power plant cost and the load price is called infra-marginal rent.

For peaking units, the costs are covered by scarcity rents, created when load is very high (peaking). Spread is called the difference between electricity prices and the production cost of the plant (mainly involving fuel costs). Clean spread is the difference between electricity prices and the production cost of the plant, including taxes (such as the CO2 price or the carbon floor in the UK). The main competition is between coal and gas, called clean dark spread and clean spark spread, respectively.

How electricity wholesale markets work in EU28

In 2015, there were several bidding zones, but the purpose of the European policymakers is to make an European Energy Market, with one central market. A bidding zone is the largest geographical area where bidders can exchange energy without constraint . The bidding zones are CWE (France, Belgium, Netherlands, Germany, Austria, Luxembourg), NordPoolSpot (Sweden, Denmark, Finland, Estonia, Latvia, Lithuania and Norway), Apennine (Italy), Iberia (Spain and Portugal), CEE, also known as PXE (Poland, Czech Republic, Slovakia, Hungary, Slovenia, Romania), and Greece. Other couplings were constructed between countries, but they do not significantly affect price differentials.

Some of those bidding areas are now further integrated to form an even larger European power exchange, limited only by the level of interconnection between systems. National power markets still exist, such Romania’s OPCOM, Portugal’s OMIP or Spain’s OMEL, which creates some overlap.

Those bidding zones or power exchanges, including national power exchanges, work as a genuine exchange, trading electricity like any other commodity. NordpoolSpot, the leading European power market, for example offers day-ahead and intraday spot contracts for Nordic, Baltic and UK’s N2EX markets and intra-day spot contracts for the German market. The European Energy Exchange (EEX) and EPEX Spot, a joint venture between Germany’s EEX and France’s PowerNext, offer day-ahead and intraday spot contracts for Germany, Austria, France and day-ahead spot contracts for Switzerland. In addition, EEX has also future contracts, varying from day to year futures, for about all Western countries.

One Second After – William R. Forstchen

She’d always talk about how great Gandhi was. I’d tell her the only reason Gandhi survived after his first protest was that he was dealing with the Brits. If Stalin had been running India, he’d been dead in a second, his name forgotten.

Have you wondered what will happen if electricity suddenly stops coming? This book replies exactly at that questions, under a fictional story following an ex-military history professor, in a small town in the mountains in the United States.

Loss of electricity (not a blackout, in a blackout you kind of expect electricity to return) can have several reasons. In this book, there is an electromagnetic pulse that fries the grid and everything electric (circuitry). This threat is actually possible, and the guy in the US Army looking at this problem (asymmetrical threats) was an advisor for the book.

In case electricity stops coming, the very fiber of society disintegrates: no communications (no phones, television, internet, newspapers), no commerce (no card readers, only cash for a while, then only barter), no food (no refrigeration, no trucks to bring food to supermarkets, no machinery to harvest, no trucks to bring food from silos to animal farms), government loses the monopoly of violence (how can you announce the police of a robbery, crime, rape, if communications are down?), no medicines for the needy (diabetics and others). Also, no hygiene products for women.

Without electricity

Electricity allows to increase tremendously the efficiency of agriculture and food production. Therefore, as soon as it disappears, human population reduces to the efficiency of food production before electricity. This means mass starvation, which the book painfully describes.

The story takes place in the United States, in a mountain town. Hence, some features are present, which might be specific to the country, such as : numerous people have guns that can hunt with and many citizens have military experience. This comes as an advantage, because, as society breaks, individuals usually kept in check by police, re-surge as organized bands, taking food by force and killing. Police can’t quickly intervene, without the instant communications.  Also, many officers and hospital staff might be wanting to return home, at their loved ones, until some form of community protection is realized.

William R. Forstchen is asking many interesting, deep questions about the vulnerabilities of our society. The literary value of the book is quite low, writing is ok, fluid, but not fantastic; however, the strength of the book is coming from the really good questions that it asks. This is kind of hard fiction, from politically conservative perspective.

There are many low chance, high threat events that could destroy civilization. Supervolcanoes, meteorites, robots, plagues, but it is not a lot you can do if a meteorite comes. On the other hand, just blowing a nuclear bomb at high-altitude, for example 50 km up over a continent, the US Army colonel specialized in this issue argues, is enough to destroy a country. In the book, they don’t even know who launched the nuclear bomb. All that they know was that the launch was from a freighter out in the sea and they speculate that maybe a terrorist group or a country not friendly to US or even a large power that covered their tracks really well.

A report from nine scientists was published, unluckily in the day of the 9/11 attacks and, seemingly, a US Congress inquiry was made over this, but overridden by the terrorists attacks.

Overall, a must-read book for the interesting questions it asks.


[Picture from http://maxpixel.freegreatpicture.com/Strommast-Current-Pylon-Steel-High-Voltage-Sunset-520008%5D

A few words about energy and electricity – differences

Energy is the basis for modern human civilization, because of the significant increase in productivity it brings. It is a vital part for most, if not all, of human activities: agriculture, communications, trade, manufacturing, mining, education, health etc. Consequently, there is a correlation between energy consumption and wealth (Webber, 2013).

According to the first law of thermodynamics, which says that energy of an isolated system is constant, humans are basically transforming energy that is already in the system into energy more convenient to use. For example, a windmill transformed wind energy into mechanical energy used to mill grain. Replacing human muscle with wind energy increased enormously the efficiency of the process. Repeating this idea for thousand and thousand of processes led to the highly efficient and also highly energy-transformative economy we have today.

For dawns of civilization the main energy source used by humans was wood, later followed by coal and now we live in an era dominated by oil.

There are many forms of energy – kinetic (motion), thermal, chemical, nuclear, radiant (light), gravitational, etc – electricity is just a form of energy, used according to our needs. Electrical conversion is basically a transformation of various energies already existing in the system. For example, thermal energy (heat – which is basically kinetic energy at molecular level) from burning coal; or kinetic energy from wind motion; or gravitational energy from waterfalls is converted into electrical energy.

Energy sources have several classifications. For example, the International Energy Agency manual for energy statisticians (IEA, 2005), which shares harmonized definitions, units and methodology with Eurostat, the statistical office of the European Union, and the United Nations Economic Commission for Europe, considers that energy sources (called “commodities”) can produce primary electricity through direct use of natural resources, such as hydro, wind, solar, tide and wave power or they can produce secondary electricity, using thermal energy as intermediate step, such as from nuclear fission of nuclear fuels, geothermal heat and solar thermal heat, or by burning coal, wood, natural gas, oil, etc.

US Energy Information Administration (EIA, 2015) makes the distinction between primary energy sources and secondary energy sources. Primary energy sources are those forms of energy, such as oil, natural gas, coal, uranium, biomass, wind, that are used to convert energy into energy carriers. Energy carriers, called secondary energy sources, such as electricity and hydrogen, transport energy, which is later converted into other forms of energy that are useful for humans. Electricity is used because it is easy to transport and can be quickly transformed in other forms of energy we need (kinetic, e.g. for coffee maker, thermal, e.g. for light bulbs).

Other several classifications, more or less scientific are used. Conventional energy is used mainly to nominate energy production from fossil fuels, while alternative energy is basically any source other than fossil fuels. Renewable energy is energy derived from processes with a replenishment rate higher than consumption. Eurostat, however, considers biofuels and municipal waste as renewables. Green energy is any form of energy with small environmental impact at its end-use (IEA, 2015; Webber, 2013). However, all energy sources have an environmental impact (Webber, 2014, Sheldon 2014, Mayfield, 2015).

Energy is not the same as power, although similar in meaning. Energy is power over time. For example, a refrigerator has a power of 225 Watts, and in an hour it uses 225 Wh (energy.gov, 2015), which is a measure of energy.

From a long term energy strategy standpoint, the second law of thermodynamics, which says that entropy always increases or remains the same in a close system, is relevant. This means that Earth-based highly-ordered forms of energy, such as fossil fuels, will always have conversion loses, because Earth is a closed system (Sheldon, 2013; Webber, 2013). For example, overall efficiency for converting primary energy to light using a light bulb is just 1.6% (Tester et al, 2005, p.58). However sun radiance can be used at will, because Earth is not a closed system regarding this type of energy (Webber, 2013; Sheldon, 2013).

In other words, there is a lot of space for progress in energy production.