Large industrials and electricity sourcing during the process of liberalization Power sourcing strategies according to different market structures

Power sourcing for large industrials has changed since many countries began to restructure their electric sectors. Before, energy sourcing was limited to a set of products offered by electric companies under regulation. Nowadays, deregulation of electricity markets provides industrials significant choice in energy sourcing for the first time, changing the way how electricity is purchased, and increasing the need for sourcing strategy development. In this paper it will be presented how changes as consequences of market reforms affect the way electricity is procured. Different type of market and the power price structures will be explained. The increasing demands of energy, the ambitious goal of increasing electricity supply from renewables and the recent blackouts in different parts of the world suggest the need for a new and different approach to energy supply which could be self-generation. Self-generation has gained attention given that it can contribute to achieve the goals of the EU Energy Policy. In the past, self-generation was considered only as backup, mainly to improve the reliability of supply and partly, when it was possible, to reduce the cost. Now, since the process of liberalization progressed and large industrials gained the right to sell generated power on the market, it offers more possibilities for its use.

CDM Working Papers Series.

 Record created 2008-06-17, last modified 2018-03-17

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