within their provinces. Construction of transmission networks stretching through several regions
requires the involvement of several regional grid
companies. There is no merchant involvement in
transmission investment.
(3) Level of locational pricing
There is no locational pricing and transmission
congestion is not priced. The regulatory bodies,
the NDRC and State Electricity Regulatory
Commission set the wholesale and retail prices of
electricity. Provincial governments amend the
centrally set price to achieve local policy and
economic development goals.
(4) Modernising network arrangements
China does not have specific procedures to
ensure non-network alternatives to new transmission assets are assessed in new transmission
planning and investment decisions, though
investment in electricity storage is increasing.
The Chinese government runs pilot projects and
subsidises investment in private battery storage
projects. According to Bloomberg New Energy
Finance, around 180 MW of battery storage is
under development in China. The government’s
Golden Sun programme subsidises investment in
photovoltaic panels and battery storage.
(5) Summary of arrangements
See Table 3.
(2) USA
The US transmission network consists of interlinked regional transmission networks, each of
which covers a large geographic area and has a
different institutional model and set of arrangements to the others. Figure 38 presents the
regional transmission networks of the USA. While
some of them have adopted state-of-the-art
approaches and are interconnected with their
neighbours, others are isolated and remain vertically integrated from generation to retail. Moreover, five alternating current electricity grids
(Eastern, Western, Quebec, Alaska and Texas
interconnections) cover the USA and Canada and
tie together regional transmission networks, and
hence utilities, in their territory.
(1) Institutional arrangements
Two federal regulators, Federal Energy Regulatory Commission (FERC) and North American
Electric Reliability Corporation (NERC), oversee
the US transmission system. FERC regulates the
transmission and wholesale sale of electricity in
interstate commerce, reviews the siting application for transmission projects, and ensures reliability of the interstate transmission system by
setting standards. NERC, overseen by FERC,
develops reliability standards and ensures the
reliability and security of the power system as a
whole.
Before the liberalisation of the US electricity
sector, vertically integrated utilities owned and
operated generation, transmission and retail of
electricity in their area. These utilities were
operating in poorly interlinked regional transmission networks covering a single state or a
group of states (region). Following large blackouts in the north-east in the 1960s, NERC promoted
interconnection
of
neighbouring
transmission networks, so they could exchange
power and increase the reliability of the whole
transmission system.
The Energy Policy Act of 1992 laid the
ground for the liberalisation of the US electricity
sector. It opened the electricity market to independent generators and gave FERC the authority
to regulate all wholesale electricity transactions.
FERC issued several orders and proposed a
standard market design for the US electricity
sector. It promoted the unbundling of electricity
generation, transmission and retail, with transmission arrangements following the independent
system operator/regional transmission organisation (ISO/RTO) model. According to the standard market design, ISO/RTO ensures open
access for all generators to the transmission
system, manages a competitive wholesale spot
market, and controls congestion using locational
pricing. ISOs and RTOs have similar responsibilities, and in practice there is very little difference between the legal definition of each. FERC
proposed to exercise jurisdiction over transmission owners and operators that had not adopted
its standard market design. Many entities challenged FERC’s proposal. Opponents argued that
106
W. Xiaoming et al.
requires the involvement of several regional grid
companies. There is no merchant involvement in
transmission investment.
(3) Level of locational pricing
There is no locational pricing and transmission
congestion is not priced. The regulatory bodies,
the NDRC and State Electricity Regulatory
Commission set the wholesale and retail prices of
electricity. Provincial governments amend the
centrally set price to achieve local policy and
economic development goals.
(4) Modernising network arrangements
China does not have specific procedures to
ensure non-network alternatives to new transmission assets are assessed in new transmission
planning and investment decisions, though
investment in electricity storage is increasing.
The Chinese government runs pilot projects and
subsidises investment in private battery storage
projects. According to Bloomberg New Energy
Finance, around 180 MW of battery storage is
under development in China. The government’s
Golden Sun programme subsidises investment in
photovoltaic panels and battery storage.
(5) Summary of arrangements
See Table 3.
(2) USA
The US transmission network consists of interlinked regional transmission networks, each of
which covers a large geographic area and has a
different institutional model and set of arrangements to the others. Figure 38 presents the
regional transmission networks of the USA. While
some of them have adopted state-of-the-art
approaches and are interconnected with their
neighbours, others are isolated and remain vertically integrated from generation to retail. Moreover, five alternating current electricity grids
(Eastern, Western, Quebec, Alaska and Texas
interconnections) cover the USA and Canada and
tie together regional transmission networks, and
hence utilities, in their territory.
(1) Institutional arrangements
Two federal regulators, Federal Energy Regulatory Commission (FERC) and North American
Electric Reliability Corporation (NERC), oversee
the US transmission system. FERC regulates the
transmission and wholesale sale of electricity in
interstate commerce, reviews the siting application for transmission projects, and ensures reliability of the interstate transmission system by
setting standards. NERC, overseen by FERC,
develops reliability standards and ensures the
reliability and security of the power system as a
whole.
Before the liberalisation of the US electricity
sector, vertically integrated utilities owned and
operated generation, transmission and retail of
electricity in their area. These utilities were
operating in poorly interlinked regional transmission networks covering a single state or a
group of states (region). Following large blackouts in the north-east in the 1960s, NERC promoted
interconnection
of
neighbouring
transmission networks, so they could exchange
power and increase the reliability of the whole
transmission system.
The Energy Policy Act of 1992 laid the
ground for the liberalisation of the US electricity
sector. It opened the electricity market to independent generators and gave FERC the authority
to regulate all wholesale electricity transactions.
FERC issued several orders and proposed a
standard market design for the US electricity
sector. It promoted the unbundling of electricity
generation, transmission and retail, with transmission arrangements following the independent
system operator/regional transmission organisation (ISO/RTO) model. According to the standard market design, ISO/RTO ensures open
access for all generators to the transmission
system, manages a competitive wholesale spot
market, and controls congestion using locational
pricing. ISOs and RTOs have similar responsibilities, and in practice there is very little difference between the legal definition of each. FERC
proposed to exercise jurisdiction over transmission owners and operators that had not adopted
its standard market design. Many entities challenged FERC’s proposal. Opponents argued that
106
W. Xiaoming et al.