London, 24 November – In a new paper published by the Global Warming Policy Foundation an eminent energy analyst makes the case for single-buyer electricity markets, arguing that they will prove more efficient in the long run.
In a single-buyer market, a central organisation is tasked with operating the grid at lowest cost to the consumer, and delivers on this objective by making long-term contracts for power delivery. Generators are paid an agreed amount to cover fixed costs, plus any fuel costs on top.
The author, power systems engineer Bryan Leyland, says:
“The single-buyer approach gives you the tight coordination of a centralised system, but with competition to ensure that generators are delivering at the lowest possible price. It should be much more efficient overall”.
And Leyland says that single-buyer markets would have been much better for the consumer in the current crisis.
Currently, market prices are set by gas-fired power stations, so the high cost of gas has handed massive windfall profits to renewables operators. In a single-buyer market, renewables would have had to stick to their long-term contracts.
Commending the new paper, GWPF director Dr Benny Peiser called for politicians to take a serious look at the proposals set out by Mr Leyland.
It is becoming ever more evident that the energy cost and security crisis cannot be fixed without significant reforms of a broken energy market. Europe’s astronomically costly energy policies have become unaffordable and won’t be able survive for much longer. Smart policy makers realising the urgent need for reform will want to read Mr Leyland’s paper.”