Market Deregulation and Growing Environmental Concerns
Providing an Impetus for Restructuring the Global Power
Industry
Reference Code: GDPE0043VPT Publication Date: August 2011
1 Table of Contents
1 Table of Contents.................................................................1
1.1 List of Tables .................................................................1
1.2 List of Figures ................................................................1
2 Summary .............................................................................2
3 Market Deregulation and Growing Environmental Concerns
Providing an Impetus for Restructuring the Global Power
Industry ................................................................................2
3.1 Power Market Deregulation Driven by Government
Policies Playing a Leading Role in Industry
Restructuring .................................................................2
3.2 Efficient and Less Carbon Intensive Technologies
Replacing the Legacy Power Sector Infrastructure .......3
3.3 Despite Safety Concerns Nuclear Power has an
Important Role in Achieving a Cleaner Environment .....4
3.4 Policy Push for Renewables Leading to an Increased
Grid Penetration of Distributed Generation Resources .5
3.5 Enabling Strategies Guiding the Global Restructuring of
Power Industry to Meet the Increasing Demand............6
3.6 Smart Grid Integration-Transforming the Grid
Operations of the Power Industry Globally ....................9
4 Appendix ............................................................................12
4.1 Abbreviations...............................................................12
4.2 Methodology ................................................................12
4.3 Contact Us...................................................................13
4.4 Disclaimer....................................................................13
1.1 List of Tables
Table 1: Nuclear Treaties/Organization and their members ...5
Table 2: Smart Grid Elements and their Functions ...............10
Table 3: Abbreviations ..........................................................12
1.2 List of Figures
Figure 1: Coal-Fired Power Plants, Efficiency Improvements
Reduce CO2 Emissions (CO2/kWh) .........................4
Figure 2: Indicative Comparative CO2 Emissions per
Megawatt hour (MWh) ..............................................4
Figure 3: Europe, Annual Energy Generation, Tera Watt-hour
(TWh), 2005-2009 ....................................................9
Figure 4: Europe, Energy Traded by Top Three Utilities, Tera
Watt-hour (TWh), 2008-2009 ....................................9
Market Analysis Alert
Market Deregulation and Growing Environmental Concerns Providing an GDPE0043VPT / AUG 2011
Impetus for Restructuring the Global Power Industry Page 1
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The power industry also has a significant impact on the
environment, as it is a major consumer of natural resources and
2 Summary fossil fuels. As a major consumer of fossil fuels the power
The global power industry has undergone significant industry is also a major source of conventional air pollutants,
restructuring due to deregulation and growing environmental including sulfur dioxide (SO2), nitrogen oxides (NOx) and
concerns. Economic deregulation initiated in the US in the secondary particulates. These emissions form a major source
1970s hit full stride towards the turn of the 21st century, with an of the greenhouse gases and toxic air pollutants that are
increased level of global private sector participation across responsible for global warming. The emissions from this
various regions of the world. The process of restructuring has industry are also an important source of pollutants to land and
played a significant role in enacting and implementing laws and water, especially in the form of radioactive waste. Growing
policies to bring more competition to electric power markets, environmental concerns have led to the formation of regulations
accompanied by effective regulations of transmission and for this industry, providing incentives for the use of various
distribution which are ensuring reliability of the grid network and facilities and fuels in electricity generation and significantly
effectively reducing the greenhouse gas emissions from the impacting on the resulting discharges to the environment.
power industry. Governments have started to introduce various Additionally, they have also resulted in the formation of
policies and reforms for the vertical disaggregation of the regulations that directly affect the incentives to comply with
monopoly structure, creating wholesale and retail power to environmental regulation.
increase economic efficiency. Other factors responsible for the The movement of restructuring the global power industry has
market deregulation include shortage of capital in rapidly been largely driven by the changes in the generation
industrializing nations, recent technological and information technology and fuel prices. These changes have made the
management innovations, emerging global competition, and power generation from the smaller units economical by
consumer demand for more sophisticated and diversified integrating the separate utility systems into larger regional
products and services. The growing competition due to networks, thereby increasing the size of the market that could
deregulation has resulted in the creation of well structured be served by individual generators. Regulations that are
electricity markets across different regions. These markets have applicable for markets of other commodities such as crude oil,
not only been able to provide effective oversight, but have also natural gas, gold, orange juice or coffee also became applicable
been able to deliver economic and environmental benefits. for electricity generation. These developments have resulted in
electricity generation also being considered as a tradable
3 Market Deregulation and Growing
commodity.
Environmental Concerns Providing an
Impetus for Restructuring the Global The growing competition due to deregulation has resulted in the
Power Industry creation of well structured electricity markets across different
regions. These markets have not only been able to provid