A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief...
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![Page 1: A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief Executive OFREG.](https://reader035.fdocuments.net/reader035/viewer/2022062511/551bc875550346af588b4f96/html5/thumbnails/1.jpg)
niaerNORTHERN IRELAND AUTHORITY
for ENERGY REGULATION
A Sustainable Energy FutureA Sustainable Energy Future
Structuring the Energy Market
Douglas McIldoon
Chairman NIAER Chief Executive OFREG
![Page 2: A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief Executive OFREG.](https://reader035.fdocuments.net/reader035/viewer/2022062511/551bc875550346af588b4f96/html5/thumbnails/2.jpg)
niaerNORTHERN IRELAND AUTHORITY
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Shaping the DebateShaping the Debate
The liberalisers
The environmentalists
The traditionalists
![Page 3: A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief Executive OFREG.](https://reader035.fdocuments.net/reader035/viewer/2022062511/551bc875550346af588b4f96/html5/thumbnails/3.jpg)
niaerNORTHERN IRELAND AUTHORITY
for ENERGY REGULATION
The LiberalisersThe Liberalisers
Competitive markets
Driving down costs
A competitive economy
The environment? Not our problem
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niaerNORTHERN IRELAND AUTHORITY
for ENERGY REGULATION
The EnvironmentalistsThe Environmentalists
Reducing C02 is paramount
Regulation is how to do it
![Page 5: A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief Executive OFREG.](https://reader035.fdocuments.net/reader035/viewer/2022062511/551bc875550346af588b4f96/html5/thumbnails/5.jpg)
niaerNORTHERN IRELAND AUTHORITY
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Environmentalists and Environmentalists and Liberalisers set the agendaLiberalisers set the agenda
Different languages
Different value systems
Different policy objectives
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Today: Policy ConfusionToday: Policy Confusion
Tomorrow: Is policy coherence possible?
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niaerNORTHERN IRELAND AUTHORITY
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Can Markets deliver sustainabilityCan Markets deliver sustainability??
Market design
Market failure
Pre-market design intervention
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Convergence of Liberalisation and Convergence of Liberalisation and EnvironmentalismEnvironmentalism
UK White Paper
EU Emissions Trading Region
Renewable Obligation
Will they work in a small market?
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niaerNORTHERN IRELAND AUTHORITY
for ENERGY REGULATION
Average real price per unit for a Domestic customer
70
75
80
85
90
95
100
105
Year
Inde
x
Index of prices
Let’s look at NI
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Change Drivers in Northern IrelandChange Drivers in Northern Ireland
New technology
Regulation
Lowering the cost of capital
Competition
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Northern Ireland C0Northern Ireland C022 Emissions Emissions
A story with:
• A Beginning
• A Middle
• An End
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3.4
3.5
3.6
3.7
3.8
3.9
4
4.1
4.2
4.3
1993 1994 1995 1996 1997 1998 1999 2000 2001
NI CO2 Emissions as % of UK Total - Power Sector
NI CO2 Emissions as % of UK Total
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0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
ton
nes
/un
it s
ales
1993 1994 1995 1996 1997 1998 1999 2000 2001 2010
NI CO2 Emissions / GWh
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Environmental Change DriversEnvironmental Change Drivers
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0
50
100
150
200
250
300
000'
s to
nn
es
1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
Carbon Savings - Energy Efficiency Levy
Carbon Savings Annual Carbon Savings Cumulative
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Renewables Growth as % of Total Consumption
0
1
2
3
4
5
6
99/00 00/01 01/02 02/03 03/04 04/05
% T
ota
l C
on
sum
pti
on
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Delivering SustainabilityDelivering Sustainability
Technology:
• CCGTs
• Domestic CHP
• Energy efficient appliances
• Time of day metering
• Renewables
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Delivering SustainabilityDelivering Sustainability
Incentive Regulation:
• NIE’s T&D price control
• NIE’s Supply price control
![Page 19: A Sustainable Energy Future Structuring the Energy Market Douglas McIldoon Chairman NIAER Chief Executive OFREG.](https://reader035.fdocuments.net/reader035/viewer/2022062511/551bc875550346af588b4f96/html5/thumbnails/19.jpg)
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Delivering SustainabilityDelivering Sustainability
Cost of Capital:
• Measures reducing cost of new investment
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Delivering SustainabilityDelivering Sustainability
Competition:
• Emissions Trading
• Renewable Certificates
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ConclusionConclusion
Environmental objectives are determined outside the market
Should be delivered at least cost to customers
Incentive Regulation and New Technology have hitherto delivered more than
competition in Northern Ireland