Evaluation of dynamic pass-through of carbon prices into electricity prices – a cointegrated VECM analysis

This paper addresses the impact of the CO2 opportunity cost on the wholesale electricity price in the context of the Iberian electricity market (MIBEL), namely on the Portuguese system, for the period corresponding to the Phase II of the European Union Emission Trading Scheme (EU ETS). In the econometric analysis a vector error correction model (VECM) is specified to estimate both long–run equilibrium relations and short–run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The model is estimated using daily spot market prices and the four commodities prices are jointly modelled as endogenous variables. Moreover, a set of exogenous variables is incorporated in order to account for the electricity demand conditions (temperature) and the electricity generation mix (quantity of electricity traded according the technology used). The outcomes for the Portuguese electricity system suggest that the dynamic pass–through of carbon prices into electricity prices is strongly significant and a long–run elasticity was estimated (equilibrium relation) that is aligned with studies that have been conducted for other markets.

Towards the wide implementation of standards IEC 61968/70 (CIM) and IEC 61850 in the distribution system (CIGRÉ C6-105_2010)

Currently, power systems (PS) already accommodate a substantial penetration of distributed generation (DG) and operate in competitive environments. In the future, as the result of the liberalisation and political regulations, PS will have to deal with large-scale integration of DG and other distributed energy resources (DER), such as storage and provide market agents to ensure a flexible and secure operation. This cannot be done with the traditional PS operational tools used today like the quite restricted information systems Supervisory Control and Data Acquisition (SCADA) [1]. The trend to use the local generation in the active operation of the power system requires new solutions for data management system. The relevant standards have been developed separately in the last few years so there is a need to unify them in order to receive a common and interoperable solution. For the distribution operation the CIM models described in the IEC 61968/70 are especially relevant. In Europe dispersed and renewable energy resources (D&RER) are mostly operated without remote control mechanisms and feed the maximal amount of available power into the grid. To improve the network operation performance the idea of virtual power plants (VPP) will become a reality. In the future power generation of D&RER will be scheduled with a high accuracy. In order to realize VPP decentralized energy management, communication facilities are needed that have standardized interfaces and protocols. IEC 61850 is suitable to serve as a general standard for all communication tasks in power systems [2]. The paper deals with international activities and experiences in the implementation of a new data management and communication concept in the distribution system. The difficulties in the coordination of the inconsistent developed in parallel communication and data management standards - are first addressed in the paper. The upcoming unification work taking into account the growing role of D&RER in the PS is shown. It is possible to overcome the lag in current practical experiences using new tools for creating and maintenance the CIM data and simulation of the IEC 61850 protocol – the prototype of which is presented in the paper –. The origin and the accuracy of the data requirements depend on the data use (e.g. operation or planning) so some remarks concerning the definition of the digital interface incorporated in the merging unit idea from the power utility point of view are presented in the paper too. To summarize some required future work has been identified.