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How to make a European integrated market in small and isolated electricity systems? The case of the Canary Islands

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  • Perez, Yannick
  • Ramos Real, Francisco Javier

Abstract

This paper presents a geographic dimension not often studied in the dynamics of creating an internal market for electricity within the European Union, namely the case of small European electricity systems like those found on the Greek islands of Cyprus and Crete. Our question, then, is how to achieve a suitable internal market for electricity in small and isolated systems. To address this issue, we identify the main problems to be overcome by introducing a methodology in which the Canary Islands experience is taken as a case study for understanding the challenges in creating an "EU-like market for electricity". Our results show that the design of the vertical industrial structure and the figure of the grid operator and its attributes are key features for the proper operation of any electrical system. We also stress the minor roles of other possible options to achieve this EU-compatible market by highlighting first, in the wholesale market, the call-for-tender solution to introduce more generation and the risk of using safety requirements as barriers to entry in these small markets, and second, in the supply activities, the potential problems of an improperly regulated tariff scheme.

Suggested Citation

  • Perez, Yannick & Ramos Real, Francisco Javier, 2008. "How to make a European integrated market in small and isolated electricity systems? The case of the Canary Islands," Energy Policy, Elsevier, vol. 36(11), pages 4159-4167, November.
    • Handle: RePEc:eee:enepol:v:36:y:2008:i:11:p:4159-4167
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    Cited by:

    1. P Codani & Marc Petit & Yannick Perez, 2018. "Innovation et règles inefficaces : le cas des véhicules électriques," Post-Print halshs-01980639, HAL.
    2. Marrero, Gustavo A. & Ramos-Real, Francisco Javier, 2010. "Electricity generation cost in isolated system: The complementarities of natural gas and renewables in the Canary Islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2808-2818, December.
    3. Alonso, Patricia Martínez & Hewitt, Richard & Pacheco, Jaime Díaz & Bermejo, Lara Román & Jiménez, Verónica Hernández & Guillén, Jara Vicente & Bressers, Hans & de Boer, Cheryl, 2016. "Losing the roadmap: Renewable energy paralysis in Spain and its implications for the EU low carbon economy," Renewable Energy, Elsevier, vol. 89(C), pages 680-694.
    4. Ries, Jan & Gaudard, Ludovic & Romerio, Franco, 2016. "Interconnecting an isolated electricity system to the European market: The case of Malta," Utilities Policy, Elsevier, vol. 40(C), pages 1-14.
    5. Rabindra Nepal & Flavio Menezes, 2017. "Regulatory Reforms in Small Energy Systems: Experience from Australia's Northern Territory Electricity Market," Economic Papers, The Economic Society of Australia, vol. 36(3), pages 300-316, September.
    6. Carlos Pereyra-Mariñez & Félix Santos-García & Víctor S. Ocaña-Guevara & Alexander Vallejo-Díaz, 2022. "Energy Supply System Modeling Tools Integrating Sustainable Livelihoods Approach—Contribution to Sustainable Development in Remote Communities: A Review," Energies, MDPI, vol. 15(7), pages 1-17, April.
    7. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    8. Rious, Vincent & Perez, Yannick, 2014. "Review of supporting scheme for island powersystem storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 754-765.
    9. Gustavo A. Marrero & Yannick Perez & Marc Petit & Francisco Javier Ramos-Real, 2015. "Electric vehicle fleet contributions for isolated systems. The case of the Canary Islands," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 15(2), pages 171-193.
    10. Psarros, Georgios N. & Papathanassiou, Stavros A., 2023. "Generation scheduling in island systems with variable renewable energy sources: A literature review," Renewable Energy, Elsevier, vol. 205(C), pages 1105-1124.
    11. Judit Mendoza Aguilar & Francisco J. Ramos-Real & Alfredo J. Ramírez-Díaz, 2019. "Improving Indicators for Comparing Energy Poverty in the Canary Islands and Spain," Energies, MDPI, vol. 12(11), pages 1-15, June.
    12. Alfredo Ramírez Díaz & Francisco J. Ramos-Real & Gustavo A. Marrero & Yannick Perez, 2015. "Impact of Electric Vehicles as Distributed Energy Storage in Isolated Systems: The Case of Tenerife," Sustainability, MDPI, vol. 7(11), pages 1-27, November.
    13. Erdinc, Ozan & Paterakis, Nikolaos G. & Catalão, João P.S., 2015. "Overview of insular power systems under increasing penetration of renewable energy sources: Opportunities and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 333-346.
    14. Psarros, Georgios N. & Dratsas, Pantelis A. & Papathanassiou, Stavros A., 2021. "A comparison between central- and self-dispatch storage management principles in island systems," Applied Energy, Elsevier, vol. 298(C).
    15. Nardi, Paolo, 2012. "Transmission network unbundling and grid investments: Evidence from the UCTE countries," Utilities Policy, Elsevier, vol. 23(C), pages 50-58.
    16. Rabindra Nepal & Flavio Menezes, 2016. "Small Energy Markets, Scattered Networks and Regulatory Reforms: The Australian Experience," Discussion Papers Series 561, School of Economics, University of Queensland, Australia.
    17. Vincent Rious & Yannick Perez, 2012. "What type(s) of support schemes for storage in island power systems?," RSCAS Working Papers 2012/70, European University Institute.
    18. Mohammad Nure Alam, 2021. "Accessing the Effect of Renewables on the Wholesale Power Market," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 341-360.

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