Electricity pricing

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Electricity pricing (sometimes referred to as electricity tariff or the price of electricity) varies widely from country to country, and may vary significantly from locality to locality within a particular country. There are many reasons that account for these differences in price. The price of power generation depends largely on the type and market price of the fuel used, government subsidies, government and industry regulation, and even local weather patterns.

Contents

Basis of electricity rates [edit]

Electricity prices vary between countries and can even vary within a single region or distribution network of the same country. In standard regulated monopoly markets, electricity rates typically vary for residential, commercial, and industrial customers. Prices for any single class of electricity customer can also vary by time-of-day or by the capacity or nature of the supply circuit (e.g., 5 kW, 12 kW, 18 kW, 24 kW are typical in some of the large developed countries); for industrial customers, single-phase vs. 3-phase, etc. If a specific market allows real-time dynamic pricing, a more recent option in limited markets to date typically following the introduction of electronic metering, prices can even vary between times of low and high electricity network demand.

The actual electricity rate (cost per unit of electricity) that a customer pays can often be heavily dependent on customer charges, particularly for small customers (e.g. residential users).[1]

Price comparison [edit]

The table below is a simple comparison of current electricity tariffs in industrialised countries and territories around the world, expressed in US dollars. Whilst useful for comparing world electricity prices at a glance it does not take into account a number of significant factors including fluctuating international exchange rates, a country's individual purchasing power parity, government electricity subsidies or retail discounts that are often available in deregulated electricity markets.[2]

A comparative list of June 2009 prices for Europe may be found in the European Household Electricity Price Index.[3]

It is worth noting that the high cost of electricity in the Solomon Islands, as shown in the table below, is primarily a result of the use of imported diesel fuel as the main source of fuel for electricity generators.[4] However, other countries that rely heavily on imported fuel oil, such as Jamaica (90% reliance), are able to sustain much lower prices.

Global electricity price comparison [edit]

Country/Territory US cents/kWh As of Sources
Argentina 70005750000000000005.75* 2006 [7][2]
Australia 700122000000000000022 to 46.56 20120823August 23, 2012 [8],[9]
Belgium 700129080000000000029.08 20111101November 1, 2011 EEP[5]
Bhutan 70001880000000000001.88 to 4.40 20120323March 23, 2012 BPC[6]
Bulgaria 700116329999999999916.33 20120701July 1, 2012 DKER
Brazil 700134200000000000034.20 20110101January 1, 2011 ANEEL
Canada 70006300000000000006.3 to 11.8 20121101November 1, 2012 THES
China 70007500000000000007.5 to 10.7 20120517May 17, 2012 [7]
Chile 700123110000000000023.11 20110101January 1, 2011 Chilectra[8]
Croatia 700117550000000000017.55 20080701July 1, 2008 HEP
Denmark 700140380000000000040.38 20111101November 1, 2011 EEP[5]
Dubai 70007620000000000007.62 2011 DEWA[9]
Finland 700120650999990000020.65 20111101November 1, 2011 EEP[5]
France 700119390000000000019.39 20111101November 1, 2011 EEP[5]
Germany 700131410000000000031.41 20120531May 31, 2012 EEP
Guyana 700126800000000000026.80 20120401April 1, 2012 GPL
Hungary 700123440000000000023.44 20111101November 1, 2011 EEP[5]
Hong Kong
(HK Is.)		 700112020000000000012.02 to 24.00 20130401April 1, 2013 HEC
India 70008000000000000008 to 12 20130201February 1, 2013 [10]
Indonesia 70008750000000000008.75 20130201February 1, 2013 RRD[10]
Iceland 70009000000000000009 to 10 20120601June 1, 2012 OR[11]
Iran 70002000000000000002 to 19 20110701July 1, 2011
Ireland 700128360000000000028.36 20111101November 1, 2011 EEP[5]
Israel 700115000000000000015* 20120101January 1, 2012 IEC[12]
Italy 700128390000000000028.39 20111101November 1, 2011 EEP[5]
Jamaica 70007350000000000007.35 to 16.80 20110601June 1, 2011 JPSCo[13]
Japan 700120000000000000020 to 24 20091231December 31, 2009 [11][14]
Kuwait 70001000000000000001 19660601June 1, 1966 Kuwait Ministry of Electricity & Water[15]
Latvia 700118250000000000018.25 20120601June 1, 2012 Latvenergo[16]
Malaysia 70007090000000000007.09 to 14.76 20130401April 1, 2013 TNB
Mexico 700119280000000000019.28** 20120822August 22, 2012 CFE[17]
Moldova 700111110000000000011.11 20110401April 1, 2011 RUF[citation needed]
Netherlands 700128890000000000028.89 20111101November 1, 2011 EEP[5]
New Zealand 700119150999990000019.15 20120419April 19, 2012
Pakistan 70002000000000000002.00 to 15.070 20120516May 16, 2012 LESCOFESCO
Papua New Guinea 700129000000000000029 201301January 2013 PNG Power, Domestic EasiPay
Paraguay 70008000000000000008 2011 ANDE
Perú 700110440000000000010.44 2007 PTL[18]
Philippines 700130460000000000030.46 20100301March 1, 2010 [12]
Portugal 700125250000000000025.25 20111101November 1, 2011 EEP[5]
Russia 70001700000000000001.7 to 9.58 20120101January 1, 2012 Irkutskenergo,Mosenergosbyt
Serbia 70003930000000000003.93 to 13.48**** 20130228February 28, 2013 [19]
Singapore 700121530000000000021.53 20130401April 1, 2013 Updated quarterly @ Singapore Power
Spain 700122730000000000022.73 20120701July 1, 2012 Iberdrola,energy.eu
Solomon Islands 700184800000000000084.8 201304April 2013 SIEA
South Africa 70008000000000000008 to 16 20121105November 5, 2012 Eskom
Sweden 700127100000000000027.10 20111101November 1, 2011 EEP
Taiwan 70007000000000000007 to 17 20120601June 1, 2012 [13]
Thailand 70004460000000000004.46 to 9.79 20110305March 5, 2011 BOI
Tonga 700157950000000000057.95 20110601June 1, 2011 [14]
Turkey 700113100000000000013.1 20110701July 1, 2011 TEDAS
United Kingdom 700120000000000000020.0 20121130November 30, 2012 EEP[5]EP
Ukraine 70003050000000000003.05 to 3.95 2011 [15][20]
Uruguay 700114470000000000014.47 to 22.89 20110218February 18, 2011 UTE
United States 70008000000000000008 to 17 ; 37*** 20120901September 1, 2012 EIA[21]
Uzbekistan 70004950000000000004.95 2011 Stroyka.uz[20]
United States Virgin Islands 700150800000000000050.8 to 54.8 20130331March 31, 2013 WAPA
Vanuatu 700158000000000000058 201304April 2013 URA, base rate
Vietnam 70006200000000000006.20 to 10.01 2011 Reuters
Jordan 70005000000000000005* to 33 20120130January 30, 2012 ERC

* Denotes countries with government subsidized electricity tariffs.[22][23][24]

** Mexico has subsidized electricity tariffs according consumption limits, more than 500kWh consumed bimonthly meet no subsidies. This tariff correspond to less expensive "tariff 1" (less than 150kWh).[25]

*** Hawaii.

**** Prices don't include VAT (20%).

The U.S. Energy Information Administration (EIA) also publishes an incomplete list of international energy prices, while the International Energy Agency (IEA) provides a thorough, quarterly review for purchase.

Forecasting [edit]

Electricity price forecasting is simply the process of using mathematical models to predict what electricity prices will be in the future.

Forecasting methodology [edit]

The simplest model for day ahead forecasting is to ask each generation source to bid on blocks of generation and choose the cheapest bids. If not enough bids are submitted, the price is increased. If too many bids are submitted the price can reach zero or become negative. The offer price includes the generation cost as well as the transmission cost along with any profit. Power can also be sold or purchased from adjoining power pools.[26][27][28][29]

Wind power and solar power, being non-dispatchable, is normally taken before any other bids, and at a pre-determined rate for each supplier. Any excess is sold to another grid operator, or stored, using pumped-storage hydroelectricity, or in the worst case, curtailed.[30] The HVDC Cross-Channel line between England and France is bidirectional, but is normally used to capacity to purchase power from France. Allocation is done by bidding.[31]

Driving factors [edit]

In addition to the basic production cost of electricity, electricity prices are set by supply and demand.[32] Everything from salmon migration to forest fires can affect current and future power prices.[citation needed] However, when forecasting those prices there are some fundamental drivers that are the most likely to be considered.[citation needed]

Weather driven demand [edit]

Studies show that generally demand for electricity is driven largely by temperature. Heating demand in the winter and cooling demand (air conditioners) in the summer are what primarily drive the seasonal peaks around the year in most regions. Heating degree days and cooling degree days help measure energy consumption by referencing the outdoor temperature above and below 65 degrees Fahrenheit, a commonly accepted baseline.[33]

Hydropower availability [edit]

Snowpack, streamflows, seasonality, salmon, etc. all affect the amount of water that can flow through a dam at any given time. Forecasting these variables allows one to predict the available potential energy for a dam for a given period.[34] Some regions such as the Pacific Northwest get a large percentage of their generation from hydro-electric dams.

Power plant and transmission outages [edit]

Whether planned or unplanned, outages affect the total amount of power that is available to the grid.[citation needed]

Fuel prices [edit]

The fuel used to generate electricity at a power plant is the primary cost incurred by electrical generation companies. Particularly, coal, as a fuel for baseload plants and more important, to a degree, natural gas for peaking plants effect power prices.[35] This will change as more renewable energy is used, when the capital cost will be the primary cost, as renewable energy (other than biomass and biofuel) has no fuel cost.

Economic health [edit]

During times of economic hardship, many factories will cut back their production due to a reduction of consumer demand and therefore reduce production-related electrical demand.[36]

See also [edit]

References [edit]

  1. ^ J. M. Pearce and Paul J. Harris, "Reducing greenhouse gas emissions by inducing energy conservation and distributed generation from elimination of electric utility customer charges", Energy Policy, 35, pp. 6514-6525, 2007. Open access available
  2. ^ a b "Los precios de la energía, desiguales en el país y lejos de los valores regionales" [Energy prices unequal in the country and much lower in the capital] (in Spanish). LA NACION. November 20, 2006. Retrieved March 30, 2012. 
  3. ^ European Household Electricity Price Index for Europe (HEPI), Who is paying the most, who is paying the least and where are prices heading in Europe?, June 2009
  4. ^ http://www.reegle.info/countries/solomon-islands-energy-profile/SB#sources
  5. ^ a b c d e f g h i j Domestic EU Electricity Prices
  6. ^ BPC Electricity Tariffs
  7. ^ http://english.sz.gov.cn/ln/201205/t20120517_1914423.htm
  8. ^ "Energy Supply Pricing for Clients Subject to Price Regulation". Chilectra. Jan 01, 2011. Retrieved Feb 10, 2011. 
  9. ^ [1]
  10. ^ [2] – Rista Rama Dhany, retrieved on March 13, 2013 (in Indonesian)
  11. ^ Prices and Rates – Orkuveita Reykjavíkur, retrieved on June 2, 2012 (in Icelandic)
  12. ^ Israel Electric Corporation
  13. ^ [3]
  14. ^ [4]
  15. ^ [5]
  16. ^ Latvenergo
  17. ^ "CFE 2012". 
  18. ^ Pliegos tarifarios de Lima-OSINERGMIN/GART
  19. ^ [6]
  20. ^ a b See list in bottom right.
  21. ^ Electric Power Monthly Average Retail Price of Electricity pg. 106
  22. ^ http://www.bloomberg.com/news/2011-11-10/argentina-doubles-power-prices-for-companies-to-stem-widening-budget-gap.html
  23. ^ http://online.wsj.com/article/BT-CO-20120725-721044.html
  24. ^ http://uk.reuters.com/article/2012/07/18/uk-israel-electric-idUKBRE86H0IT20120718?feedType=RSS&feedName=GCA-GoogleNewsUK
  25. ^ http://app.cfe.gob.mx/Aplicaciones/CCFE/Tarifas/Tarifas/Tarifas.asp?Tarifa=DACTAR1&anio=2012
  26. ^ ISO NE
  27. ^ NY ISO
  28. ^ ERCOT
  29. ^ WECC
  30. ^ Wind Power and Electricity Markets
  31. ^ IFA Overview
  32. ^ The power market - how does it work
  33. ^ Robert Carver. "What Does It Take to Heat a New Room?". American Statistical Association. Retrieved 2010-02-14. 
  34. ^ "More Reliable Forecasts for Water Flows Can Reduce Price of Electricity". Body of Knowledge on Infrastructure Regulation. January 19, 2010. Retrieved 2010-01-24. 
  35. ^ "Annual Energy Outlook Early Release Overview". U.S. Energy Information Administration. Retrieved 2010-01-24. 
  36. ^ "Demand Forecasting for Electricity". Body of Knowledge on Infrastructure Regulation. Retrieved 2010-01-24. 
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