The impact of liberalisation on the resilience of electricity systems
Author(s)
Collins, Christopher
Type
Thesis or dissertation
Abstract
Over the past three decades concerns have arisen about the ability of deregulated electricity
systems such as the UK’s to deliver secure supplies. Capacity margins have drawn particular
attention, but a number of apparently secure systems have failed for unanticipated reasons. This
has led some to question whether risk-based measures fully capture the uncertainties to which
such systems are exposed, and whether the concept of “resilience” provides a framework around
which to discuss less quantitative indicators.
This work attempts to answer four questions. First, what are the characteristics of a resilient and
secure electricity system? Second, how have these characteristics evolved over the past 25 years?
Third, to what extent can these changes be attributed to privatisation & liberalisation and to the
introduction of new forms of renewable generation? Fourth, how might the UK Government’s
proposed policies affect the security of electricity supply?
‘Resilience’ was found to be a multi-faceted concept, but five indicators were chosen for further
investigation: generation margins, system diversity, energy intensity, electricity prices and energy
independence. It was shown that a decline in margins can probably not be attributed to
privatisation, but that renewable generation can have a positive effect depending on the support
mechanism. Diversity can be enhanced by both privatisation and some forms of renewable
support, the latter also seemingly reducing a country’s import dependence, but also increasing
prices.
Whilst there is some evidence that policy changes can affect a system’s resilience, the suggestion
is that liberalisation has not had a strong overall impact. Furthermore, achieving ‘optimal
resilience’ may be inherently unachievable, meaning that policies will always need to flexible
enough to respond to change, but constant enough to encourage the necessary investment for
the future.
systems such as the UK’s to deliver secure supplies. Capacity margins have drawn particular
attention, but a number of apparently secure systems have failed for unanticipated reasons. This
has led some to question whether risk-based measures fully capture the uncertainties to which
such systems are exposed, and whether the concept of “resilience” provides a framework around
which to discuss less quantitative indicators.
This work attempts to answer four questions. First, what are the characteristics of a resilient and
secure electricity system? Second, how have these characteristics evolved over the past 25 years?
Third, to what extent can these changes be attributed to privatisation & liberalisation and to the
introduction of new forms of renewable generation? Fourth, how might the UK Government’s
proposed policies affect the security of electricity supply?
‘Resilience’ was found to be a multi-faceted concept, but five indicators were chosen for further
investigation: generation margins, system diversity, energy intensity, electricity prices and energy
independence. It was shown that a decline in margins can probably not be attributed to
privatisation, but that renewable generation can have a positive effect depending on the support
mechanism. Diversity can be enhanced by both privatisation and some forms of renewable
support, the latter also seemingly reducing a country’s import dependence, but also increasing
prices.
Whilst there is some evidence that policy changes can affect a system’s resilience, the suggestion
is that liberalisation has not had a strong overall impact. Furthermore, achieving ‘optimal
resilience’ may be inherently unachievable, meaning that policies will always need to flexible
enough to respond to change, but constant enough to encourage the necessary investment for
the future.
Date Issued
2013
Online Publication Date
2013-06-03T11:22:32Z
Date Awarded
2013-05
Advisor
Gross, Robert
Publisher Department
Centre for Environmental Policy
Publisher Institution
Imperial College London
Qualification Level
Doctoral
Qualification Name
Doctor of Philosophy (PhD)