A Developing Countries Guide To The Wholesale Energy Market
Wholesale energy is a general term referring to the sale and bulk purchase of electricity and other energy goods primarily by electric power producers, power retailers, and energy suppliers. Other participants in the wholesale energy sector are large industrial users, financial intermediaries, power marketers, and end-users such as public utilities. In some developed countries, energy consumption is heavily regulated to minimize pollution and to create a more sustainable power market. In developing countries, energy poverty is widespread due to inefficient public power systems and a lack of access to electricity for most rural areas.
The wholesale energy market
has been increasing in importance in industrialized nations for decades with the globalization of markets and communications; it became a key player in setting the international energy price during the energy crisis in the seventies. The wholesale market was also the primary force behind the development of the nuclear industry in industrialized nations; there are currently dozens of new construction projects around the world supporting this growth in markets for electricity. With the rapid growth of the wholesale energy market, governments around the world have become increasingly aware of its negative aspects including air pollution, over-saturation of the stock, and climate change. In response, these nations have begun development programs focused on reducing wholesale energy consumption.
To participate in the wholesale electricity market
an individual or organization engaged in electricity trading must open a commercial account and become a seller or supplier. There are no restrictions on buying or selling energy; there are no restrictions on the type of electricity produced or traded. An entrepreneur can participate in the wholesale electricity market either as a supplier of a seller. Although sellers of electricity generate most of their income from retail sales of electricity, they are also able to generate income through the sale of surplus energy to consumers and the generation of profit through various government programs such as feed-in tariff agreements (FOUAs), renewable electricity incentive programs, and feed-in tariffs for solar power generation.
The wholesale electricity sector
contributes to lessened levels of atmospheric pollution by reducing greenhouse gas emissions, and it contributes to the creation of employment in developing countries. It also supports international economic growth by helping the construction of infrastructure in developed nations. In addition to these positive contributions to global trade, the wholesale industry has been able to develop relationships with suppliers through the establishment of trust-based and value-added relationships. This helps promote the development of economic growth in the developing world. For example, the Brazilian wholesalers Coselecao Brasileiras and Companieira Magalufa, the German producers Hamm Chemie and Gruppenwolf, the Canadian thermal energy producer Enphase and the Japanese power producer Toshiba have formed strategic alliances with each other to build upon their unique expertise, resources, and experience in building and maintaining large-scale electricity generating plants.
The wholesale electricity market continues to grow
as more companies look to partner with suppliers to develop cost-efficient, secure, and environmentally sound systems for managing their electricity needs. The wholesale sector is now a key player in environmental and supply chain management. It provides an opportunity for companies to enter into direct sales and to market directly to consumers – opportunities that were previously only available to companies operating nationally. Through this vertical of distribution-oriented economy, the distribution companies benefit from the economies of scale provided by the wholesale electricity companies’ ability to purchase large quantities of electricity in large quantities and then pass on the savings they make to customers.
These dynamics are proving to be important factors
for the success of many small-sized enterprises. In addition to providing jobs to thousands of people in emerging markets, these new businesses are also helping to solve the problems of developing countries. Through the purchase of electric energy from these wholesalers, these developing countries can improve their public transportation systems, reduce their dependence on energy imported from foreign suppliers, and reduce their dependence on imported oil. In addition to this, these companies are making an investment in themselves that will generate a steadily increasing cash flow as the value of the currencies of these developing countries increases over time. In short, these activities are contributing to the economic well-being of millions of people around the world.