published_or_final_version / abstract / Electrical and Electronic Engineering / Doctoral / Doctor of Philosophy

The essence of this dissertation is to enlighten the client on those strategic options available for a financially viable energy source and is also aimed at increasing the electricity share of the energy market, which is currently approximately 25%. This dissertation focuses on the industrial sector of the economy. Energy sources available to the Industrial sector, namely coal, diesel, illuminating paraffin, heavy fuel oil, liquefied petroleum gas and electricity, were selected for this specific study and compared in eight geographic areas. These inland areas include Pretoria-Witwatersrand- Vereeniging (PWV), Bloemfontein, Pietersburg and Nelspruit, and the coastal areas include Cape Town, Durban, Port Elizabeth and Richards Bay. As the energy cost is not the only factor influencing the total cost of using a particular energy source, the objective for this study was also to evaluate energy sources on an effective cost basis, taking account of energy price as well as indirect costs and utilization efficiencies. The typical industrial application of steam generation was selected and the costs related to using various energy sources in this application evaluated. This study also considers critical factors likely to be taken into account by consumers when choosing an energy source, or deciding on an energy conversion, which includes Demand Side Management (DSM). DSM refers to a process by which electric utilities especially Eskom, in collaboration with consumers achieve predictable and sustainable changes in electricity demand. These changes are affected through a permanent reduction in demand levels (Energy efficiency) as well as time related reduction in demand level (Load Management) / Thesis (M.Com.)-University of Kwazulu-Natal, 2005.

published_or_final_version / Electrical and Electronic Engineering / Doctoral / Doctor of Philosophy

published_or_final_version / abstract / Electrical and Electronic Engineering / Doctoral / Doctor of Philosophy

The last decade has delivered rapid structural change to the Australian electricity sector. The common conceptualisation of the sector's restructuring has been narrowly based around sector-specific regulatory change and the creation of a national electricity market. This thesis argues that such a focus provides an incomplete and inaccurate explanation of the transformation. Three closely interrelated layers of policies and actions embodying the precepts of neoliberalism, and implemented by the state, have driven the sector's transformation. These policies and actions transcend 'electricity-centric' policies and encompass policies which have become systemic to the Australian public sector as well as a third layer which has transformed the prevailing industrial paradigm across all industry sectors. The drivers of the electricity sector's restructuring -- and the outcomes and beneficiaries arising -- form the core research focus of this thesis. The research task is addressed by using the analytical framework of the French theory of r??gulation. The analysis reveals that the electricity sector has been Australia's second largest contributor of privatisation proceeds, remains dominated by government ownership and has falling levels of foreign ownership. Higher relative wage levels and union membership are also evident as have been job losses and substantial real price increases for households whereas those for business have generally fallen. The purported 'reform' centrepiece, the national electricity market, was found to be increasingly uncompetitive due to its own regulatory regime and market manipulation by government-owned companies. In addition, the sector exhibits a heightened precariousness: an unprecedented financial vulnerability arising from a strong appetite for debt and derivatives and exacerbated by payments to government owners not by new investment in generation capacity; increasing tensions between the nation-state and local-state concerning the national electricity market and compromises with labour; and an exposure to political and financial risks from the sector's global integration. The clear winners from the sector's restructuring are the owners of capital and the state, particularly the local-state, although the sustainability of this situation is questionable. The analysis also generates a number of propositions about the application of r??gulation theory to sector-based research.

The last decade has delivered rapid structural change to the Australian electricity sector. The common conceptualisation of the sector's restructuring has been narrowly based around sector-specific regulatory change and the creation of a national electricity market. This thesis argues that such a focus provides an incomplete and inaccurate explanation of the transformation. Three closely interrelated layers of policies and actions embodying the precepts of neoliberalism, and implemented by the state, have driven the sector's transformation. These policies and actions transcend 'electricity-centric' policies and encompass policies which have become systemic to the Australian public sector as well as a third layer which has transformed the prevailing industrial paradigm across all industry sectors. The drivers of the electricity sector's restructuring -- and the outcomes and beneficiaries arising -- form the core research focus of this thesis. The research task is addressed by using the analytical framework of the French theory of r??gulation. The analysis reveals that the electricity sector has been Australia's second largest contributor of privatisation proceeds, remains dominated by government ownership and has falling levels of foreign ownership. Higher relative wage levels and union membership are also evident as have been job losses and substantial real price increases for households whereas those for business have generally fallen. The purported 'reform' centrepiece, the national electricity market, was found to be increasingly uncompetitive due to its own regulatory regime and market manipulation by government-owned companies. In addition, the sector exhibits a heightened precariousness: an unprecedented financial vulnerability arising from a strong appetite for debt and derivatives and exacerbated by payments to government owners not by new investment in generation capacity; increasing tensions between the nation-state and local-state concerning the national electricity market and compromises with labour; and an exposure to political and financial risks from the sector's global integration. The clear winners from the sector's restructuring are the owners of capital and the state, particularly the local-state, although the sustainability of this situation is questionable. The analysis also generates a number of propositions about the application of r??gulation theory to sector-based research.

In chapter 1, I study long term contracts in retail electricity markets. Deregulation of retail electricity markets gives consumer choices over contracts of different lengths. Long term contracts allow consumers to hedge against future price increase, but they can be more expensive than spot contracts. There is little empirical evidence on how consumers value long term contracts. Using a dataset from an incumbent retailer containing 10-year panel of consumer contract choice data, this paper analyzes consumers' valuations of long term contracts. I first document that a significant percentage of consumers actively choose long term contracts when they are more expensive than shorter contracts. To quantify the value of long term contracts and welfare implication of product innovation after retail deregulation, I build and estimate a dynamic model that incorporates risk preference, price expectations and consumer inertia. Counterfactual calculation shows that on average consumers gain about 6% per month from long term contracts. In chapter 2, I quantify the effect of introducing large-scale renewable energy on the wholesale electricity market. Renewable energy capacity has increased in many markets as renewable is crucial to reduce emission in the energy sector. More than 8GWh of wind capacity has been added in Texas between 2014 and 2017. Using hourly data from Texas, I find increasing daily wind energy production results in statistically significant reduction of wholesale electricity price for all hours of the day except 10pm, and the effect is larger during peak hours. Increasing wind production reduces output from both coal and natural gas power plants. Using hours when no transmission limit is binding and load is above 50th percentile in the load distribution, I find increasing hourly wind production reduces offer prices submitted by owners of fossil fuel power plants. In chapter 3, I study the effect of transmission limit on market outcomes. Wholesale electricity markets are often subject to transmission constraints that prevent efficient dispatch of power. Increasing renewable capacity demands transmission infrastructure investment. In 2011 to 2013, Electricity Reliability Council of Texas (ERCOT) constructed several high voltage transmission lines from the wind-rich west Texas to demand centers. Using data on electricity production, demand, price and information on grid congestion, this paper shows that an increase of 100MW in the transmission limit from the West to the North reduces the hourly output of fossil fuel generators in the North by 71.1MWh and decreases the price in the North by 0.17$/MWh when the transmission constraint from the West to the North is binding. Meanwhile, the increase of the transmission limit reduces dispatch of coal and combined cycle gas power plants in the North, but increases production of simple cycle and steam gas power plants in the North.