Tag Archives: Energy

Regulation of the Power Sector – Ignacio Pérez-Arriaga (ed.)

Grids limit the operation of the electricity system in many ways. The most typical limitation is congestion, which occurs when the maximum current that can be handled by a line or other facility is reached, thus determining the amount of electric power that can flow through the element in question. The underlying cause for the limitation may be thermal, and therefore dependent upon the physical characteristics of the facility. It may also be related to the characteristics of system operation as a whole; for instance, provisions to guarantee security in the system’s dynamic response to disturbances or to stability-related problems that usually increase with line length.

Another typical grid constraint is the need to maintain voltages within certain limits at all nodes, which may call for connecting generating units near the node experiencing problems. The maximum allowable short-circuit power established may also limit grid configuration. Generally speaking,
the main effect of grid constraints is to condition system operation and in so doing to cause deviations from economically optimum operation. The most common constraints in distribution grids are related to voltage and maximum line capacity.

“Regulation of the Power Sector” is a comprehensive technical book on the electricity sector, aimed at specialists and advanced students. It encompasses several scholarly fields, including law, economics, regulation, physics and political science.

It is divided into 14 chapters, as follows: I. Technology and Operation of Electric Power Systems; II. Power System Economics; III. Electricity Regulation: Principles and Institutions; IV. Monopoly Regulation; V. Electricity Distribution; VI. Electricity Transmission; VII. Electricity Generation and Wholesale Markets; VIII. Electricity Tariffs; IX. Electricity Retailing; X. Regional Markets; XI. Environmental Regulation; XII. Security of Generation Supply in Electricity Markets; XIII. Electricity and Gas; XIV. Challenges in Power Sector Regulation.

The first electromagnetic generator, invented by Michael Faraday in 1831.

The authors cover pretty much everything in terms of background in energy regulation, with a focus, but not exclusive, to European regulation and market design. The book reads as a manual and goes into detail in explaining why some regulatory decisions were taken. However, it does not push a message or contributes to the scholarly debate, it is more a stocktaking exercise.

The book makes the basis for the Regulation of the Power Sector course at the Florence School of Regulation, a 6-months intensive training for professionals in the area.

The authors are mostly academics and former regulators with plenty of practical examples. What is impressive is that they managed to have a very balanced approach in a highly divisive area.

The volume is not an easy read, some diagrams and formulas taking some time to digest, even for specialists. This is because the book encompasses a very wide range of fields, from formulas taken from the field physics to economic calculations.

For energy professionals, I commend the book, as a very comprehensive summary of energy regulation, theories and basics of the power system. It refreshes knowledge and fills some gaps, in a balanced way.

Sources of electricity – oil

Oil or petroleum was once a key player in the electricity sector, but now it is used only marginally, usually as back-up reserve in diesel generators for major consumers, such as factories, hospitals, airports or as an electricity source in islands (for example in Greece).

Oil lost its share because of price, it is far more expensive to burn oil than burning coal or gas.

Merits of oil include high energy density, easy to transport and very stable composition, remaining liquid in most climatic conditions. Drawbacks of oil are price are environmental concerns (Webber, 2014).

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.