In
economic terms, electricity (both power and energy) is a commodity
capable of being bought, sold and traded. An electricity market is a
system for conducting sales, purchases, and short-term trades. Bids
and offers use supply and demand principles to set the price.
Short-term trades are contracts similar to power purchase agreements
and are generally considered private bi-lateral transactions between
counterparties. Retail transactions (bids and offers) in electricity
are typically cleared and settled by the market operator or a
special-purpose independent entity charged exclusively with that
function. Market operators do not clear trades but often require
knowledge of the trade in order to maintain generation and load
balance. The commodities within an electric market generally consist
of two types: power and energy. Power is the metered net electrical
transfer rate at any given moment and is measured in megawatts (MW).
Energy is electricity that flows through a metered point for a given
period and is measured in megawatt hours (Mwh).
One
of the colossal factors that drives the retail power market design is
the need to rapidly expand energy access to underserved or unserved
areas. Another major factor that pushes the market is the government
regulations that emphasize on reducing the health and environmental
impact of electricity service. Moreover, developing the
cost-effectiveness and reliability of power utilities act as catalyst
for the power market. Despite this, the retail electricity market is
facing certain challenges in terms of promoting the entry of new
sources of distributed generation. This is because it could be
perceived as threat to the existing market participants. Furthermore,
reducing health and environmental impacts by encouraging energy
efficiency and greater deployment of various renewable energy sources
could challenge the existing investment framework. Also, rapidly
expanding energy access might increase costs for existing customers.
These constraints give rise to widespread opportunities for companies
and investors in terms of increasing revenues in distribution as well
as retail power trading.
The
retail power market is bifurcated based on the method of transaction
between buyers and sellers of electricity. One method is bilateral
trading, wherein the buyer and the seller come to a mutual agreement
with each other over the number of units to be traded and the price
per unit. Another method is to make a collective agreement based on a
supply region. In this case one power generator (seller) makes an
accord with a regional conglomerate to supply electricity to various
buyers but under one agreement. A third method is that the buyer
approaches the local energy exchange. The buyer places a bid on the
per unit price of electricity and once mutually agreed, the required
number of units are purchased.
Geographically,
the European region is the most active in terms of electricity
trading, led by Germany, Austria, France and Switzerland. The United
States is the leader in the North American region with the largest
over the counter (OTC) trading market. The Asia-Pacific expanse has
widespread retail electricity trading with major trading facilities
established in Australia, Malaysia, Singapore, China and India. Rest
of the World countries that have major electricity trading operations
are South Africa, the Middle East electricity trading conglomerate
and Brazil, Argentina and Paraguay in Latin America.
Some
of the key players in the retail electricity market are:
Constellation Energy Resources, LLC, Hydro One, Inc., Enersource
Corporation and R&M Electrical Group Ltd.
Enquiry
Before Buying :-http://www.transparencymarketresearch.com/sample/sample.php?flag=B&rep_id=3230
