• Assessment of the implementation of cross-border balancing trade between Belgium and the Netherlands

      Vandezande, Leen; Saguan, Marcelo; Meeus, Leonardo; Glachant, Jean-Michel; Belmans, Ronnie (2009)
    • Experience with electricity market test suite: students versus computational agents

      Trinh, Quynh Chi; Saguan, Marcelo; Meeus, Leonardo (IEEE Transactions on Power Systems, 2013)
      This paper applies two experimental economics methods (i.e., agent-based modeling and laboratory experiment) to a market test suite that is based on a fictional European wholesale electricity market. Quantitative results of generators' strategic behavior in this market context are separated between generators played by human subjects (i.e., master students) in a laboratory experiment and generators represented by computational agents in an agent-based model. The behavior is measured through offers that students or agents make when participating in the electricity trading auction and the market outcomes under both methods are discussed in order to illustrate the difference between the behavior of human and computational agents. The paper also identifies the improvements that would need to be made to the market test suite to allow for a more conclusive comparison in future experiments.
    • Impact of the regulatory framework for transmission investments on the cost of renewable energy in the EU.

      Saguan, Marcelo; Meeus, Leonardo (Energy Economics, 2014)
      Under the current regulatory frame in the EU, transmission planning is done at the national level to maximize national welfare, rather than European welfare. In this paper, we develop a competitive equilibrium model that calculates the impact of this imperfect regulatory framework on the cost of renewable energy. We apply the model to a power system with two interconnected zones, and find that the impact is case specific, but significant. We also find that the negative impact of national transmission planning on the cost of renewable energy is more significant in a state of the world in which Member States trade renewable energy, but that this negative effect is much smaller than the positive effect of renewable energy trade between Member States. We conclude that the imperfect regulatory framework for transmission investment is a significant cost for renewable energy in the EU, but that it should not stop Member States from trading renewable energy.
    • Implementation of cross-border balancing in Europe

      Vandezande, Leen; Meeus, Leonardo; Belmans, Ronnie; Saguan, Marcelo; Glachant, Jean-Michel (2008)
    • Innovating grid regulation to regulate grid innovation: from Orkney Isles to Kriegers Flak via Italy

      Meeus, Leonardo; Saguan, Marcelo (Renewable Energy, 2011)
      n the current context of a decarbonizing electricity system, grid innovation is needed to deal with the main challenges of integrating distributed generation, demand and storage, and large-scale renewable energy sources. Grid companies however have disincentives to innovate under the conventional regulatory framework, and if they do innovate, they are confronted with grid users that have disincentives to participate in the innovation. This paper analyzes three empirical cases where state of the art regulatory frameworks have been successful at stimulating grid innovation. The main lesson learned from the cases is that there is experience with addressing the disincentive of grid companies to innovate, but the participation of grid users in the innovation is much more an open issue
    • Lacking balancing market harmonisation in Europe: Room for trader profits at the expense of economic efficiency?

      Vandezande, Leen; Saguan, Marcelo; Meeus, Leonardo; Glachant, Jean-Michel; Belmans, Ronnie (2009)
    • Modeling the cost of achieving a renewable energy target: does it pay to cooperate across borders?

      Saguan, Marcelo; Meeus, Leonardo (2011)
      Electricity markets are increasingly integrated across borders, but transmission and renewable energy policies often remain local and uncoordinated. In this paper, we analyze how cooperative behavior in developing renewable energy technologies across borders and/or cross-border transmission capacity investment can reduce the cost of achieving a renewable energy target. We use a three step equilibrium model with: i) transmission investment, ii) generation investment and iii) electricity market that we apply to an interconnected two zone system. We find that it pays to cooperate if the zones have different renewable energy sources, but the success of a renewable energy cooperation also depends on cooperation in transmission development, which is therefore an important interaction to take into account in renewable energy policy discussions.
    • Offshore grids: towards a least regret EU policy

      Meeus, Leonardo; Lévêque, F.; Azevedo, Isabel; Saguan, Marcelo; Glachant, Jean-Michel (2012)
      The objective of the 5th report of THINK has been to formulate policy recommendations to the European Commission (DG Energy) on offshore grids, and this brief is derived from that report. The development of an offshore grid is able to play a significant role in the accomplishment of the EU energy and climate objectives. The total installed capacity of offshore wind farms is expected to increase from the existing 3 GW to about 40 GW by 2020. The number one priority project in the recently proposed EU infrastructure package is the Northern Seas offshore grid. There are two possible offshore grid developments (Figure 1): there could be a multiplication of standalone lines, which already exists today; or there could also be a transition towards combined solutions, which requires more advanced grid technology than what is currently on the shelf. The first would correspond to an increase of shore to shore investments to exchange energy across borders or to relieve congestion within an onshore grid, and an increase in farm to shore investments to connect offshore wind farms to the existing onshore grid. The second instead would imply mixed investments, combining the connection of offshore wind farms with the creation of interconnection capacity. The potential for EU added value depends on which of these alternative offshore grid developments will prevail. The economic case for combined solutions is still uncertain, but regulation needs to be proactive to avoid compromising this possible offshore grid development. It means that we have to address the fact that the currently mainly national regulatory frames for farm to shore and shore to shore investments are unsound, and the difficulties to design and develop combined solutions are tremendous. We recommend the European Commission to take initiatives to: 1// harmonize into economically sound regulatory frames for offshore transmission investments; 2// harmonize the renewable support schemes for offshore wind farms; 3// facilitate the ex-ante allocation of costs and benefits of offshore transmission investments; 4// speed-up offshore grid technology development; 5// adapt the Community-wide transmission planning to offshore grids, while also allowing regionalized solutions for the implementation of some of these remedies. A least regret EU policy on offshore grids indeed also implies giving a chance to regional initiatives, such as the North Seas Countries’ Offshore Grid Initiative.
    • Smart regulation for smart grids

      Meeus, Leonardo; Saguan, Marcelo; Glachant, Jean-Michel; Belmans, Ronnie (2012)
    • Smart regulation for smart grids

      Meeus, Leonardo; Saguan, Marcelo; Glachant, Jean-Michel; Belmans, Ronnie (2010)
      The European Union set ambitious objectives for the year 2020 in terms of increase of renewable generation, energy savings and reduction of GHG emissions. These objectives lead Europe towards a complete decarbonisation of the electricity system. There is a key role to be played by grids in facilitating the required transformation and this implies they need to become “smart”. In practical terms, making grids smart means deepening the energy system integration and grid users participation. Grids have to reconfigure notably for the integration of distributed generation (DG), the integration of massive large-scale renewable (RES), and for the integration of facilitating demand response. Smarter grids need a smarter regulation. A smart regulation reconfigures the incentives and coordination tools of grid companies and grid users and aligns them towards the new policy objectives. Some of the incentives provided to grid companies and grid users by the existing regulation must be corrected and some additional mechanisms must be conceived and experienced.
    • Well-functioning balancing markets: a prerequisite for wind power integration

      Vandezande, Leen; Meeus, Leonardo; Belmans, Ronnie; Saguan, Marcelo; Glachant, Jean-Michel (Energy Policy, 2010)
      This article focuses on the design of balancing markets in Europe taking into account an increasing wind power penetration. In several European countries, wind generation is so far not burdened with full balancing responsibility. However, the more wind power penetration, the less bearable for the system not to allocate balancing costs to the responsible parties. Given the variability and limited predictability of wind generation, full balancing exposure is however only feasible conditionally to well-functioning balancing markets. On that account, recommendations ensuring an optimal balancing market design are formulated and their impact on wind generation is assessed. Taking market-based or cost-reflective imbalance prices as the main objective, it is advised that: (1) the imbalance settlement should not contain penalties or power exchange prices, (2) capacity payments should be allocated to imbalanced BRPs via an additive component in the imbalance price and (3) a cap should be imposed on the amount of reserves. Efficient implementation of the proposed market design may require balancing markets being integrated across borders.