About 18 months ago I posted a blog suggesting that we would need to rethink the design of electricity markets to tackle some of the long-term challenges that will be posed by the future electricity system. The rise of renewables will mean that the electricity price in liberalised markets is low or near-zero for an… Read More

Previously, I’ve published a short report including analysis of the economics of mini-grids, illustrating how the relative merits of Solar Home Systems (SHS), mini-grids, and grid extensions evolve with distance from the grid. New geo-spatial data tools, such as the Open Source Spatial Electrification Tool (OnSSET), allow for more detailed modelling of these economics, to… Read More

There remain barriers to scaling up off-grid barriers, and the placemat below identifies some of the practical strategies that companies can implement to help drive the growth of the new business models that they develop.  … Read More

The importance of cost reflectivity has been central to economic regulation.  Price signals that reflect the true underlying cost of an action are important when trying to incentivise the right behaviours through the whole value chain.  In the power sector, this is true whether we are referring to decisions made by end consumers, or decisions… Read More

Since the deregulation of utilities in the 1990s, a conventional wisdom has been established whereby some utility functions have been subject to revenue regulation, and other utility functions have instead operated in a competitive marketplace.  As a general rule, in Europe as least, power generation and upstream activities are subject to competition, while network activities… Read More

Solar costs have been falling rapidly and the promise of a carbon-free electricity system seems ever closer.  An auction for utility-scale solar in Zambia earlier in June resulted in a price of 6 $c/kWh, and a recent auction in Dubai led to a price of 3 $c/kWh.  If these prices result in real projects, then they are a… Read More

In a previous post I presented some (very back-of-the-envelope) calculations on the economics of decentralisation, and when it might make sense to disconnect, or defect, from a centralised power network.  Recently there has also been a shift in donor focus towards less centralised power solutions.  Large-scale power projects are not about to disappear, but the latest Power Africa… Read More

This week the UK Government issued a consultation on further tweaks to the Capacity Market, including a possible acceleration of its introduction.  Putting aside the politics behind the proposals, the consultation makes this as good a time as any to consider whether our current thinking on electricity market design for a low carbon generation mix… Read More