Comparison between European electricity market and American electricity market (PJM)

American Electricity Market PJMPrepared by-Ashish Jha ()Onkar Jadhav (11007877)Hafeez Khan (11008321)Vedant Kadam (11007891)

AMERICAN ELECTRICITY MARKET• A market of 300 million people spread across 50 states and 9.8 million

square km .• Electricity generation is governed by complex network of several federal

states .• Electricity manged and distributed by three interconnection zones .

• US electric utilities are regulated by both state and ferderal regulatory bodies that are :-

- FERC (Federal energy regulatory comission)- State utility comission

• Stands for Pennsylvania New jersey Maryland power pool .

• Coordinates the movement of electricity in all or parts of 13 states and the district of columbia .

• It is a RTO in united states and the parts of eastern interconnection grid .

History at a glance• Founded in 1927• Independent federally regulated

organization .• Became ISO in 1997 .• Designated an RTO in 2001 .

Source- http://www.ferc.gov/market-oversight/mkt-electric/pjm/elec-pjm-footprint.pdf

KEY STATISTICS

MARKET

• PJM administers wholesale markets for large blocks of electricity .

• Internet base market .• Attracts renewable power sources , such as

wind , to the region .• Administer demand response program .

EUROPEAN ELECTRICITY MARKET

EU ENERGY POLICYIt has three main goals :- Security of supply Competitiveness SustainabilityENERGY UNIONEnergy union strategy project launched in 2015 with of providing :- Secure energy Sustainable energy Competitive energy Affordable energy .MAIN TASK Energy security , solidarity and trust . A fully integrated european energy market . Energy efficiency contributing to moderation of demand . Decarbonising the economy . Research, innovation and competitiveness .

EU ENERGY TARGETSTargets for 2020• 20% of energy from renewable sources .• 20% energy efficiency improvement .• Reducing greenhouse gases by at least 20% compared to 1990 levels .Targets for 2030 40% reduction in greenhouse gas emission . At least 27% from renewables . Increase energy efficiency by 27-30% . 15 % electricity interconnection .Target for 205080-90% cut in greenhouse emission compared to 1990 levels.CURRENT SCENARIO• Greenhouse gas reduced by 18% compared to 1990 level .• Renewables share reached 16% .

SINGLE MARKET PROGRESS• Wholesale electricity prices declined by one third and whole sale

gas prices remained stable .• Consumers have more choices .• Cross-border trade in gas and electricity between EU countries

has increased. • Establishment of missing missing links between EU countries .Further Steps More investments in infrastructure including smart grids should

be made . Government intervention should only happen when secure

energy flows cannot be guaranteed by the market . Proper link between retail and wholesale market .

How PJM Works

Three Priorities• PJM’s three priorities are: keeping the lights on, administering the

buying and selling of electricity through wholesale electricity markets, and assessing and planning for the future needs of the electric grid

Source- https://learn.pjm.com/three-priorities.aspx

Keeping the Lights ON

Generation to meet Demand

Source- https://learn.pjm.com/three-priorities/keeping-the-lights-on/how-pjm-schedules-generation.aspx

Energy use varies with Season

Source- https://learn.pjm.com/three-priorities/keeping-the-lights-on/how-pjm-schedules-generation.aspx

Buying and Selling Energy1. Energy Market

• PJM’s real time market• PJM’s day ahead market

Source- https://learn.pjm.com/three-priorities/buying-and-selling-energy/energy-markets.aspx

Buying and Selling Energy2. Capacity Market

• Procurement of capacity three years before it is needed through a competitive auction,

• locational pricing for capacity,• a variable resource requirement curve.

Source- https://upload.wikimedia.org/wikipedia/commons/a/ae/Wal-Mart_in_Madison_Heights.jpg

Buying and Selling Energy

3. Locational Marginal Pricing• to set prices for energy purchases and sales• to price transmission congestion costs• analogous to a taxi ride

Source- https://learn.pjm.com/three-priorities/buying-and-selling-energy/lmp.aspx

Planning for Future

1. Regional Transmission Expansion Planning• New transmission lines• Replacing existing high-voltage transmission lines with lines capable of

carrying more power• Installation of devices that maintain voltage levels.

Source- https://learn.pjm.com/three-priorities/planning-for-the-future/rtep.aspx

Planning for Future

2. Power Plant Retirements• Newly built Power Plant, upgrades to existing

plants or from sources external to PJM.• Transmission line upgrades or new

transmission lines and substations.• Increases the overall flow of electricity.• Upgrades typically end up bringing more MW

Source- https://learn.pjm.com/three-priorities/planning-for-the-future/explaining-power-plant-retirements.aspx

Market and Operations

26.09.201626.09.2016

Source- http://www.pjm.com/markets-and-operations.aspx

Increasing Renewables

Source- https://www.cleanenergywire.org/factsheets/setting-power-price-merit-order-effect

ConclusionPJM- European markets-

Powerpool trading Day ahead auctions Local authorities are involved Nodal Pricing NO market interconnection

Bilateral trading Limited public involvement Zonal Pricing Market coupling

Source- https://tu-dresden.de/gsw/wirtschaft/ee2/ressourcen/dateien/dateien/ordner_enerday/ordner_enerday2007/ordner_vortrag/meeus_paper.pdf?lang=en

Sources

• http://www.pjm.com/about-pjm/who-we-are.aspx

• http://www.ferc.gov/market-oversight/mkt-electric/pjm.asp

• https://learn.pjm.com/electricity-basics.aspx

THANK YOU..!