Can We Trust in Electricity Markets?
Wholesale electricity prices that reflect scarcity and surplus are pivotal to advancing demand response and storage and, as such, are a means to achieving a cost-effective transition to reliable, sustainable, and affordable energy. However, Europe’s power stakeholders cannot rely on wholesale prices reflecting system conditions—such as scarcity—in real time if and when such conditions arise. This is largely due to regulators’ interventions to protect electricity consumers from high prices out of fear that dominant market players will abuse their market power and hold consumers ransom.
Policymakers can break through the vicious cycle driving these interventions by establishing market monitoring mechanisms to provide stakeholders with timely, high-quality data analysis and interpretation to demonstrate that the market is serving its purpose and market participants are behaving appropriately.
In a webinar held on 31 May 2016, Sarah Keay-Bright of RAP and Dr. Joseph Bowring of Monitoring Analytics, the independent market monitor for the PJM Interconnection in the U.S., discussed best practices for market supervision. The speakers explored the quality of market monitoring, governance, and enforcement in the European context, lessons learned from other jurisdictions, and an in-depth look at Monitoring Analytics’ role, governance, organization, relationships with key stakeholders, and key successes.