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Past And Potential Roles Of Electricity System Operators: From Liberalisation To Climate Change Management In Britain

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  • Jon Stern

Abstract

This paper discusses the changing role of electricity system operators in Britain. Until 2008, the UK electricity system operator was the key co-ordinator for a liberalized electricity generation market. However, since 2008, the British electricity system operator has, under the Energy Market Reform, primarily become a delivery agency for technology-specific generation within a planned electricity system. This paper discusses the transformation in the role of the British electricity system operator since 2008 and analyses the relationship between this change and the development of EU energy and climate change policy. The paper concludes with a discussion of the alternative views of the EU energy policy – the EU Commission has been proposing much increased interconnection to encourage multi-country regional markets, linking those markets into a Single European Electricity Market. Conversely, the UK, Germany and some other Member States have been promoting their national markets based on large-scale investment on national renewables with sizeable budgetary subsidies, supported by capacity payments. The role of the national electricity system operator is central to this debate with its functions very different in the two models.

Suggested Citation

  • Jon Stern, 2015. "Past And Potential Roles Of Electricity System Operators: From Liberalisation To Climate Change Management In Britain," Cambridge Working Papers in Economics 1507, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1507
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    References listed on IDEAS

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    1. repec:aei:rpbook:24881 is not listed on IDEAS
    2. Michael G. Pollitt, 2011. "Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector," Working Papers EPRG 1125, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    3. Stern, Jon, 2012. "System Operators in the England and Wales Water Industry: Lessons from US and EU Energy Industry Experience," The Journal of Economic Asymmetries, Elsevier, vol. 9(1), pages 133-172.
    4. Pollitt, Michael G., 2012. "Lessons from the history of independent system operators in the energy sector," Energy Policy, Elsevier, vol. 47(C), pages 32-48.
    5. Cave, Martin & Stern, Jon, 2013. "Economics and the development of system operators in infrastructure industries," Utilities Policy, Elsevier, vol. 26(C), pages 56-66.
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    More about this item

    Keywords

    System operator; climate change policy; electricity liberalization; renewable generation; EU energy policy;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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