How Electricity Pooling differ from Bilateral contract system - Essay Example

This was disbanded and replaced by the New Electricity Trade Agreements (NETA), which fostered the relationship of bilateral trading that did not allow for the inherent market manipulations seen in the Pool experience. The new agreements used a forward trade market by developing Power Purchase Agreements, constructed to enhance healthy economic competition. While the cost of development of NETA is debatable, the governing bodies of the Great Britain electricity service industry remain encouraged by the end results of NETA, as it delivered lowered costs for end-consumers and removed the ability of major players to manipulate the market.

For an effective understanding of the electronic service industry and the marketing impacts it manifests, it is first important to understand the deliverables of energy distribution as a commodity. As a commodity, the electrical service contains unique and unequivocal attributes due to the amalgamated technical aspects which prevail in this service domain. The interconnected technical characteristics as well as the commoditized aspects of this industry in turn beget exceptional considerations in the manner of trade within the industry.

The following summarises Steve Thomass (2006) description of the characteristics of electricity as a commodity. Electricity functions as a commodity with distinctive features that separate the electricity service industry from incommensurable service industries. Electricity, foremost, is a constant in the neoteric society, and secondarily the electricity service industry has a prevalent impact on the ecological aspect of the modern world, which separates it drastically from standard service markets-except perhaps the manufacturing industries.

In the archetypal industries, the product can be stored to allow for effective supply and demand distributions when a service product becomes diminished or bounteous, the suppliers have the ability to control the