Impact of Deregulation - DSM in Industries
Summary
The competition of the deregulated electricity market has increased the
suppliers efforts to serve their customers with attractive ''added values''
included in the electricity sales contracts. To study the deregulation's
impact on DSM measures, computer simulations have been performed of the
electricity use and of potential end-use measures at some industries' in
Sweden. The industrial simulation model INDSIM has been applied on the industries'
load curves and measures as load management, introduction of dual fuel systems
and potential energy efficiency improvements have been simulated. To compare
the consequences upon DSM measures from the different market philosophies
the analyses are based on both former traditional, monopoly electricity
contracts and on typical modern, competitive contracts.
Among others it is shown that the electricity costs for industries has
decreased considerably after the deregulation and that energy efficiency
improvements as a consequence has become less profitable. The same investment
brings a lower pay off when the electricity market is competitive. Concerning
the competition between oil and electricity for heating, due to price
structures, oil has after the deregulation sometimes become more economically
benefiting than electricity. This is a surprising result since the average
price level for electricity is lower than it was before. Regarding load
management, in spite of the lack of power related charges in the electricity
sales contracts, these measures can be more profitable after the deregulation.
A fact that mainly depends on increased power charge levels in the electricity
distribution contracts. Anther consequence of the deregulation is that
the electricity sales companies' basic motives for DSM measures have become
evident; to tie old and new customers tighter to the company through increasing
their comfort and reducing their energy costs. The grid owners' incitements
for introducing DSM measures are more traditional; to avoid heavy investments
due to bottle-necks in the distribution grid or to reduce the own power
related subscription costs paid to the regional distribution company.
Conflicts may occur within the same group of companies if the sales company
activate DSM measures that at the same time effectively reduces the income
of the gird owner.
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