• Focus Area Electricity Sector Transition
  • Type Discussion paper
  • Date 17 March 2024
Print

Abstract

For important domestic public policy reasons, many oil- and natural-gas-producing countries allocate fuels to their electricity sector at administratively set prices that are below fuel opportunity costs. This article shows that dispatching power units based on fuel opportunity costs can significantly increase efficiency, while, for political reasons, end users’ electricity prices can continue to be defined based on administratively set fuel prices. In addition, opportunity cost dispatch can bring about environmental benefits when it results in switching the priority levels of oil and gas units in the merit order. This work also resolves the electricity trading dilemma since countries do not want to export electricity based on domestic prices.

Authors

Marie Petitet

Senior Fellow Marie is a Senior Fellow in the Utilities & Renewables Department. Since she joined KAPSARC in 2021, her research has…

Marie is a Senior Fellow in the Utilities & Renewables Department. Since she joined KAPSARC in 2021, her research has focused on power system modeling (KAPSARC Power Model), market designs for energy transitions, and framework analysis for reliable and resilient power systems.

Prior to joining KAPSARC, Marie worked as a Research Engineer within the Research and Development (R&D) unit of the utility group EDF in Paris, France. During her EDF journey, she worked on long-term and short-term electricity market design, the transmission grid at the European scale, and smart-charging opportunities for electric vehicles. Marie also worked as a researcher within the Market Department of the French Transmission System Operator RTE.

Marie holds a Ph.D. in Economics from Dauphine University, PSL (France), an M.Sc. in Environmental and Energy Economics from Ecole des Ponts ParisTech (France), and a M.Sc. in Engineering from ENSTA Institut Polytechnique de Paris (France).

Expertise

  • Electricity Markets
  • Power System Modeling
  • Electricity Market Design and Regulation
  • Energy Transition
  • Energy and Climate Policy

Publications See all Marie Petitet’s publications

Frank Felder

Visiting Researcher Frank is an engineer, energy policy analyst, and a visiting researcher at KAPSARC. Prior to joining KAPSARC, Frank was a…

Frank is an engineer, energy policy analyst, and a visiting researcher at KAPSARC. Prior to joining KAPSARC, Frank was a Research Professor at the School of Planning and Public Policy at Rutgers University, Director of the Rutgers Energy Institute, and Director of the Center for Energy, Economics and Environmental Policy. In those roles, he conducted original and applied research in the areas of electric power system modeling, clean energy policies, and climate change for academic foundations, government agencies, and energy utilities. He has also worked as an economic consultant and nuclear engineer.

Expertise

  • Energy Policy
  • Electricity Restructuring and Energy Modeling

Publications See all Frank Felder’s publications

Amro Elshurafa

Executive Director Dr. Elshurafa is the Executive Director of the Utilities and Renewables Department and possesses 20+ years of experience garnered on…

Dr. Elshurafa is the Executive Director of the Utilities and Renewables Department and possesses 20+ years of experience garnered on three continents. His research interests lie in renewable energy policy, electricity market design and regulation, and power systems modeling. He has led and executed several national modeling initiatives at distributed and utility scales. Some aspects of his research have been adopted by BP in their seminal annual Statistical Review. He is listed among the top 2% scientists globally as per Stanford, and he is a board member of the Saudi Water and Electricity Regulatory Authority. Credited with 50+ papers and patents, he holds a Ph.D. in Engineering and an MBA in Finance.

Expertise

  • Renewable Energy Policy
  • Electricity Market Design and Regulation
  • Power Sector Modeling

Publications See all Amro Elshurafa’s publications

Share this Publication

Stay informed

 I'm interested in

Select the updates you'd like to receive from us

About

A bit about you