Browsing by Subject "electricity"

Due to recent price volatility in the EU electricity markets, exceptional intervention measures have been implemented to ease the increased pressure on European households and businesses. This thesis examines the measure of setting a cap on market revenues for inframarginal energy generators. The thesis is divided into three sections. The first part of this research highlights the main elements of the EU’s energy policy objectives, attempts to trace back to the causes of the energy crisis, and examines how the current electricity market design contributes to attaining these goals. The second part deals with the content of the temporary regulatory measure that sets a cap on market revenues and attempts to identify some of its key costs and benefits. Finally, the third section takes a more pragmatic approach aiming to determine the risks adopting such regulatory measures may impose on the renewable energy industry by drawing from empirical data acquired from industry operators via survey responses. Combining these three parts of research, this thesis seeks to first determine and introduce the causes of the current electricity market crisis as well as the aspects of the current electricity market design that may be considered to malfunction. The second research question deals with the content of the regulatory measures adopted to mitigate this crisis in electricity markets attempting to conclude whether this measure can be considered an effective intervention. Along with the aims of the first and second parts, this thesis also attempts to assess the potential risks such regulation may have on the future of the renewable industry, forming the third research question answered through empiricism: how could this temporary measure affect the generators of renewable energy in the long-term? Besides providing a brief overview on the current EU electricity market design, this thesis aims to establish the importance of transitioning to renewable energy and increasing its role in the EU energy mix to not only be vital for environmental sustainability but a key element in ensuring the security of supply by diversifying the energy mix and decreasing the EU’s dependency on imported energy, as well as cutting off indirect support to Russian war. Along with this aim, it attempts to examine the effectiveness of the approach of setting a cap on market revenues on inframarginal technologies, especially considering the green transition targets of the EU.

Dairy farms account for a large portion of the greenhouse gas emissions in the planet. Since cow manure provides a good medium for anaerobic digestion, this study analyzes the economic feasibility of installing a biogas plant adjacent to a 200-cow farm in Finland. The farms in this study produce only cow manure and grass silage to feed the digester. This paper focuses in comparing different scenarios such as electricity production for farm needs and the production of biofuels such as compressed biomethane as an additional business activity. After designing the farm economic model and the biogas installation, we provide an economic analysis of each scenario. The first one shows that it is not feasible to run the biogas business model based only on electricity savings for the farm. The second one proves that additional revenue streams such as biofuel production can revitalize and strengthen the financial model of the plant. Then, the sensitivity and reliability of the model is discussed by providing reasons (i.e. Finnish electricity tariff system) for the outcome of the results. The model reinforces the idea that farms must base their biogas business model on alternative side-streams and do not rely on energy production only. For further research, it is recommended that real life farm business models are incorporated as input data and a proven plant and CHP engine energy balance is secured.