We've talked about Ghana and Abu Dhabi, examples or case studies of electricity market structure. This graphic shows a more conceptual view of how electricity markets can be structured. In Model 1, we have perhaps this graphical traditional vertically integrated utility, where there's one thing, we have blue box represents, could be a government agency or typically a regulated monopoly that generates, transmits, and distributes electricity and provides it to customers residential and C&I or commercial industrial, and in turn, the customers give that organization money. This into organization within the blue box, the classic utility, electric utility is either a government agency or more typically regulated. That's how it used to work throughout most of the world and most of the 20th century but as we're talking about, that's changing. A slight variation on that is, it works that way except independent power producers can also generate. This is how Ghana works as we talked about, except the G and T and D are broken into distinct boxes, but they're all regulated organizations or companies, and there is a main generation in Ghana's case Volta River Authority, but there's also independent power producers as well. Abu Dhabi is like this, except generation is exclusively with these joint ventures. So it's a slight variation, but that's the general idea. Let's move on to some different structures. We'll talk about France, quite a different structure, and we'll talk about why. France as most of you know border in the South by Spain, Belgium, Germany, Switzerland, Italy. As you may also know, the French electricity system is dominated by nuclear, which provides just under two-thirds of capacity and of course, a greater fraction of generation. There's also a fair bit of renewables as well, largely hydro, but a growing amount of wind and PV, as you find in most countries of the world. How does the system work? Well, remember we have our functions here, generation, transmission, distribution, and retail means who actually sends the bill out to the customers. The way it works in France is there's a company called EDF and their various subsidiary companies and they dominate most of the electricity functions in France. In generation, leading company is EDF, Electricite de France. You may have heard of or just called or known as EDF. They have about 80 percent of the capacity in France, but there are some other companies that play small roles. The transmission is done by an organization called RTE, which has a 100 percent of the market. Distribution is done by ErDF, which manages most of the distribution networks, though there are a number of small companies that serve a small percent of the population, but most of the distribution is done by ErDF. Retail, who actually provides the bill and collects the money and parcels it out, again an EDF type organization. But the question is, who owns RTE or controls the RTE? Who owns or controls ErDF?. EDF does. EDF basically does most of generation, all transmission, and most of distribution. Who owns EDF? Well, a variety of organizations, but the French government is the majority owner of EDF. It's a slightly complex structure where a private company that has majority government ownership provides most of electricity. This I would say not typical, slightly more unusual structure, but that's the way it works in France. This is a graphic that has more detail that we're going to time to get into but let me point out a few things about the French market mechanism. As it says here. This is from a 2015 report. The French generation and retail markets are still dominated by EDF. So this company does most of electricity in France. It's largely government-owned. By the prior graph, the government owns a majority piece of EDF and furthermore, it is regulated. But there are some interesting aspects of it and the generation side, as it says here, EDF is the main actor, but there are IPPs, we've seen that before in Ghana and in UAE. Independent power producers do have a small piece of the market and something we haven't seen yet or introduce this concept bits by bit is there is a bit of retail choice. In some cases in France, a customer can buy electricity via this whole system BF, essentially from EDF, or in some cases, a customer could choose something else. There some retail choice or retail competition, where a customer can say, "I want to buy from somebody else," and then they'll use EDF system to get it to them, but they'll actually contract for generation from, for example, an IPP. So you can see that's different. That's not how it worked in either Ghana or in UAE, it's a different market structure. You can see there's a lot of variations. In the next video, we'll start looking at some other countries and some other concepts to bring us up to speed on what's actually going on in the electricity industry.
