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#Energy & Sustainability

The role of system operators in network industries

  • July 10, 2012
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Document(s)
REPORT | The role of system operators in network industries

A single European energy market with multi-national arrangements involves major new and difficult issues: technical, economic and political – particularly in gas. For gas, the upheavals involved to existing market arrangements from the 3rd Package are much greater and there are real questions as to the feasibility, let alone the desirability of the reforms; for railways, system operator functions have existed from at least the 1840s. As railway networks developed, there was a need initially for common track gauges across areas and timetables – as well as for common signalling procedures, common emergency procedures, rail network expansion plans and investments, etc. For water supply, there has been no EU legislation as yet on inter-state water trade nor on SO-type arrangements. Apart from England and Scotland, vertical integration without any explicit SO remains the overwhelmingly dominant – and largely unchallenged – model.

This CERRE Energy & Climate report considers the role of system operators of various types, including ‘virtual’ system operators, in the electricity, natural gas, railways and water supply industries. It discusses the roles of alternative types of SO, firstly, in single-area jurisdictions – primarily nation states, except for water supply; and, secondly, in multi-area jurisdictions e.g. regional groupings of states or, for water supply, regional water markets.

Author(s)
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Jon Stern
Jon Stern
Centre for Competition and Regulatory Policy (CCRP), City University London

Jon Stern is a Senior Adviser at CEPA (Cambridge Economic Policy Associates) and a founder member of the Centre for Competition and Regulatory Policy at the City University. For over 15 years, Jon Stern was a Senior Consultant and Special Adviser at NERA, where he worked primarily on energy sector and utility reform, restructuring and regulation, initially in Central and Eastern Europe, Asia and Africa. Jon Stern has regularly worked as a consultant to the World Bank on energy sector and other infrastructure industry regulatory and restructuring issues. He has also worked on UK policy, including infrastructure industry and regulatory issues, labour market and energy policy. Prof Stern has been an expert witness to the House of Lords Select Committee on Regulators and an expert adviser to the Jamaican Office of Utility Regulation. Prof Stern has written extensively on regulatory governance issues, on labour market topics and on utility and energy sector reform, particularly in transition and developing countries. He is co-author of the World Bank Handbook for Evaluating Infrastructure Regulatory Systems. He has also been working on UK water industry and environmental regulatory topics.

Jon Stern is a Senior Adviser at CEPA (Cambridge Economic Policy Associates) and a founder member of the Centre for Competition and Regulatory Policy at the City University. For over 15 years, Jon Stern was a Senior Consultant and Special Adviser at NERA, where he worked primarily on energy sector and utility reform, restructuring and regulation, initially in Central and Eastern Europe, Asia and Africa. Jon Stern has regularly worked as a consultant to the World Bank on energy sector and other infrastructure industry regulatory and restructuring issues. He has also worked on UK policy, including infrastructure industry and regulatory issues, labour market and energy policy. Prof Stern has been an expert witness to the House of Lords Select Committee on Regulators and an expert adviser to the Jamaican Office of Utility Regulation. Prof Stern has written extensively on regulatory governance issues, on labour market topics and on utility and energy sector reform, particularly in transition and developing countries. He is co-author of the World Bank Handbook for Evaluating Infrastructure Regulatory Systems. He has also been working on UK water industry and environmental regulatory topics.

Martin Cave
Martin Cave
Visiting Professor
Imperial College London

Martin Cave is a Visiting Professor at the Imperial College London. He was an Academic Co-Director at CERRE.

He is a regulatory economist specialising in competition law and in the network industries, including airports, broadcasting, energy, posts, railways, telecommunications and water.

Professor Cave has published extensively in these fields, and has held professorial positions at Warwick Business School, University of Warwick, and the Department of Economics, Brunel University.

Martin Cave is a Visiting Professor at the Imperial College London. He was an Academic Co-Director at CERRE.

He is a regulatory economist specialising in competition law and in the network industries, including airports, broadcasting, energy, posts, railways, telecommunications and water.

Professor Cave has published extensively in these fields, and has held professorial positions at Warwick Business School, University of Warwick, and the Department of Economics, Brunel University.

Guido Cervigni
Guido Cervigni
Senior Advisor
Guido is an economist, former regulator, market designer and company strategist. He has been a consultant for more than ten years, holding director level positions in leading international consulting firms.
Guido has advised regulators, system operators, exchanges and businesses across Europe on a wide range of regulatory issues in energy markets, including market design, price regulation, contracts and asset evaluation, cost-benefit analyses and unbundling. He has also advised private clients on competition and commercial disputes including analysis of state aids, assessing allegations of competitive abusive behaviors and estimating antitrust damages.
As a member of System Operation Expert Group advising the European Regulators’ Group for Electricity and Gas (ERGEG), Guido was involved in the development of the EU framework guidelines on System Operations; he was also a member of ACER’s expert group on capacity remuneration systems.
Guido is research director at GREEN, the Centre for Geography, Resources, Environment, Energy and Networks at Bocconi University, Milan and gas advisor of the Florence School of Regulation.
Guido received a PhD in economics from Bocconi University, Milan.
Guido is an economist, former regulator, market designer and company strategist. He has been a consultant for more than ten years, holding director level positions in leading international consulting firms.
Guido has advised regulators, system operators, exchanges and businesses across Europe on a wide range of regulatory issues in energy markets, including market design, price regulation, contracts and asset evaluation, cost-benefit analyses and unbundling. He has also advised private clients on competition and commercial disputes including analysis of state aids, assessing allegations of competitive abusive behaviors and estimating antitrust damages.
As a member of System Operation Expert Group advising the European Regulators’ Group for Electricity and Gas (ERGEG), Guido was involved in the development of the EU framework guidelines on System Operations; he was also a member of ACER’s expert group on capacity remuneration systems.
Guido is research director at GREEN, the Centre for Geography, Resources, Environment, Energy and Networks at Bocconi University, Milan and gas advisor of the Florence School of Regulation.
Guido received a PhD in economics from Bocconi University, Milan.

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