稳步前进：为什么新的电力市场需要授予合同

A Steady Hand for Wobbly Steps:Why New Electricity Markets NeedPublic Disclosure Authorized The bottom line.New electricity markets carry inherent risks of volatility and market powerabuse—“teething troubles” that can derail reform. Vesting contracts are transitional financialhedges imposed before privatization to stabilize generator revenues and protect retailers—and, ultimately, consumers—from price shocks. By mimicking the natural hedge of a verticallyPublic Disclosure Authorized Maelle Barronettis a consultant in the samepractice. Kabir Malikis a senior energy specialist in thesame practice. Historyprovides stark warnings of what happens whenthese transition risks are mismanaged. In the 1990s, theBritish pool suffered significant market power abuse by aduopoly (National Power and PowerGen), that drove pricesup and eventually forced a costly abandonment of themandatory pool system in favor of New Electricity TradingArrangements—an overhaul estimated at over £700 million.The California energy crisis of 2000 tells a similar story: a What options do market designers havewhen choosing a transition mechanism? There are several ways to manage the value ofgeneration assets and protect buyers during market One option is to provide one-off payments to generators tocompensate for stranded costs, or to retailers for legacy tariffobligations. Such measures can address part of the balancesheet problem but do not create an ongoing framework to Another common measure is to impose relatively low marketprice caps in the hope that they will protect consumers andunhedged buyers from extreme price spikes. At first glance,this seems attractive. However, experience—including the The problems outlined above are not theoretical anomalies.They are the predictable symptoms of markets where play- Low price caps often: Although market experts have repeatedly urged that tran-sition mechanisms be put in place, their omission remainscommonplace. Over the past 25 years, several markets inAsia and Eastern Europe have launched without a propermechanism to protect generators or retailers from price risks.Nor is the mismanagement of spot price volatility unique to 3Blunt the investment signal for new capacity, especiallypeaking plants that rely on infrequent price spikes to 3Weaken incentives for operational reliability of flexibleunits, because the revenue upside of being available 3Distort the interplay between different market segments—as seen in Ukraine, where imbalance volumes rose from 2percent to 20 percent after market opening as genera- 3Create incentives for other forms of market intervention(e.g., rushed capacity payment schemes to attract new Nascent markets face existential risks thatcan derail deregulation before it begins. Once introduced, become politically difficult to remove or What are the advantages of vestingcontracts? Vesting contracts have proved more effective than pureprice caps in markets where a few large generators California offers a cautionary example. With inadequatehedging in place, regulators turned to ever- tighter pricecaps to contain utility losses. This removed important marketprice signals and discouraged new entry just when additional Their success in Singapore and Australia, among other mar- Selective and targeted protection.Price caps apply to every unit in the market, including potential new entrants.Capping prices when supply is scarce reduces the expectedreturn on new investment, especially for fast-start peakingunits that depend on short periods of high prices. Vestingcontracts, by contrast, can target incumbent generators A third option is to require certain players to sell or buy aminimum share of their expected volume through transpar-ent markets, such as day-ahead auctions. This can deepen Finally, vesting contracts are a more comprehensive transi-tion mechanism. They are typically imposed between incum-bent generators and retailers at the time of unbundling and Better incentives for investment and availability.Under well-designed vesting contracts, generators still see strong incentives to be available during periods of scarcity. Highspot prices create a valuable revenue opportunity for anyuncontracted volume. At the same time, heavily contractedgenerators know that extreme prices can turn into losses if 3Providing revenue stability for generators, thereby sup- 3Protecting retailers and consumers from extreme spot 3Disciplining market power while preserving spot market Support for privatization and tariff commitments.Vesting contracts can lock in a predictable revenue stream for gen-erators, which makes asset values more predictable andsupports higher sale prices in privatizations. They also allow Vesting contracts are transitional financialtools that replicate the stability of vertical Preserving the role of spot markets.Finally, vesting con-tracts allow spot markets to function with minimal interven- and investment signals that competitive markets need.