• 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
    • Is advertising for losers? An empirical study from a value creation and value capturing perspective

      Tackx, Koen; Rothenberger, Sandra; Verdin, Paul (European Management Journal, 2017)
      Does advertising lead to higher profits? This question has preoccupied company executives and academic researchers for many decades. Arguments have been put forth in both directions, and evidence is mixed at best. In this article, we re-examine the question from a value creation and value capturing perspective, which allows us to re-interpret and reconcile the different views and empirically validate the resulting hypotheses. Using a database of the top 500 brands of established companies during the 2008-2015 period, we find that advertising spending has no significant impact on profitability, while both brand value and research and development (R&D) spending have a clearly positive effect. In addition, we observe a positive interaction effect between advertising spending and R&D spending and a negative interaction between brand value and R&D spending on profitability. These findings corroborate the view that advertising in and of itself does not improve profitability, rather, its effect is positive only when it acts in support of customer value creation as a result of R&D.
    • The issues that shape strategy

      Meeus, Leonardo (The European Business Review, 2021)
      Companies do not only compete in markets; they also compete on social and political issues. Depending on the business opportunities or threats they identify related to an issue, companies will behave as veterans that defend the status quo in an industry, as reformers that will work with the authorities to change the rules of the game, or as heroes that help solve an issue. In this article, we identify the typical elements of success for each of these three generic nonmarket strategies. We do this based on a framework that focuses on the framing of issues, the alliances that can be mobilized around an issue, and the arenas that can be used to make a move.
    • Least-cost distribution network tariff design in theory and practice

      Schittekatte, Tim; Meeus, Leonardo (The Energy Journal, 2020)
      In this paper a game-theoretical model with self-interest pursuing consumers is introduced in order to assess how to design a least-cost distribution tariff under two constraints that regulators typically face. The first constraint is related to difficulties regarding the implementation of cost-reflective tariffs. In practice, so-called cost-reflective tariffs are only a proxy for the actual cost driver(s) in distribution grids. The second constraint has to do with fairness. There is a fear that active consumers investing in distributed energy resources (DER) might benefit at the expense of passive consumers. We find that both constraints have a significant impact on the least-cost network tariff design, and the results depend on the state of the grid. If most of the grid investments still have to be made, passive and active consumers can both benefit from cost-reflective tariffs, while this is not the case for passive consumers if the costs are mostly sunk.
    • Market coupling and the importance of price coordination between power exchanges

      Meeus, Leonardo; Vandezande, Leen; Cole, S.; Belmans, Ronnie (Energy, 2009)
      In Europe, market coupling stands for a further integration of wholesale trading arrangements across country borders. More specifically, it refers to the implicit auctioning of cross-border physical transmission rights via the hourly auctions for electric energy organized by power exchanges (PEXs) one day ahead of delivery. It therefore implies that the PEXs can optimize the clearing of their day-ahead auctions. Due to verticals in the aggregated order curves, the optimal solution can be settled at different prices. In order for prices to give correct locational signals for network development, generation and consumption, price coordination between exchanges is necessary. The paper illustrates this issue, its relevance and discusses how to deal with it.
    • Mobilizing cities towards a low-carbon future: Tambourines, carrots and sticks

      Azevedo, Isabel; Delarue, Erik; Meeus, Leonardo (Energy Policy, 2013)
      In the transition towards a low-carbon future in Europe, cities' actions are of major importance due to the prominence of urbanization, both in terms of population and in terms of greenhouse gas (GHG) emissions. As a result, we need city authorities to act, by using their competences as policy makers as well as energy users. However, cities are still not moving as fast as one might expect, indicating the need for additional incentives to prompt local action. Therefore, the aim of this paper is to present an overview of external incentives that might prompt cities to act and to highlight good practices that could be used in future initiatives. This paper first discusses how to evaluate the climate and energy performance of a city and how local authorities can contribute to its improvements. Moreover, it analyses the disincentives that local governments are confronted with, categorizing them as simple market failures, institutional failures and multi-agent failures. The paper then presents a survey of initiatives at national and EU levels to promote local action towards a low-carbon future; grouping them into tambourines, carrots and sticks. We focus on Austria, Germany, the Netherlands and Sweden because they are pioneering countries regarding energy policies for cities.
    • Offshore grids for renewables: do we need particular regulatory framework

      Meeus, Leonardo (Economics of Energy & Environmental Policy, 2015)
      Onshore, generators are connected to the transmission grid by TSOs. This regulatory model could simply be extended to offshore (i.e. Germany), but the connection of offshore wind farms to shore is also an opportunity to test alternatives, i.e. the third party model (i.e. the UK) or the generator model (i.e. Sweden). In this paper, we argue that the third party and generator models are indeed better suited to support the evolution towards larger scale offshore wind farms that are increasingly developed farther out to sea, while the TSO model is better suited to support the evolution towards cross-border offshore grid projects. In other words, an important trade-off needs to be made because none of the existing regulatory models can fulfill all the expectations in the current context in Europe. And, the trade-off has to be made at the regional or EU level because the different national regulatory frameworks are incompatible when applied to a cross-border offshore grid project.
    • PEV storage in multibus scheduling problems

      Momber, Ilan; Morales-España, Germán; Ramos, Andrés; Gómez, Tómas (IEEE Transactions on Smart Grids, 2014)
      Modeling electricity storage to address challenges and opportunities of its applications for smart grids requires inter-temporal equalities to keep track of energy content over time. Prevalently, these constraints present crucial modeling elements as to what extent energy storage applications can enhance future electric power systems' sustainability, reliability, and efficiency. This paper presents a novel and improved mixed-integer linear problem (MILP) formulation for energy storage of plug-in (hybrid) electric vehicles (PEVs) for reserves in power system models. It is based on insights from the field of System Dynamics, in which complex interactions between different elements are studied by means of feedback loops as well as stocks, flows and co-flows. Generalized to a multi-bus system, this formulation includes improvements in the energy balance and surpasses shortcomings in the way existing literature deals with reserve constraints. Tested on the IEEE 14-bus system with realistic PEV mobility patterns, the deterministic results show changes in the scheduling of the units, often referred to as unit commitment (UC).
    • A project buffer and resource management model in energy sector: A case study in construction of a wind farm project

      Zohrehvandi, Shakib; Vanhoucke, Mario; Khalilzadeh, Mohammad (International Journal of Energy Sector Management, 2020)
      Purpose This study aims to introduce an efficient project buffer and resource management (PBRM) model for project resource leveling and project buffer sizing and controlling of project buffer consumption of a wind power plant project to achieve a more realistic project duration. Design/methodology/approach The methodology of this research consists of three main phases. In the first phase of the research methodology, resource leveling is done in the project and resource conflicts of activities are identified. In the second phase, the project critical chain is determined, and the appropriate size of the project buffer is specified. In the third phase of the methodology, buffer consumption is controlled and monitored during the project implementation. After using the PBRM method, the results of this project were compared with those of the previous projects. Findings According to the obtained results, it can be concluded that using PBRM model in this wind turbine project construction, the project duration became 25 per cent shorter than the scheduled duration and also 29 per cent shorter than average duration of previous similar projects. Research limitations/implications One of the major problems with projects is that they are not completed according to schedule, and this creates time delays and losses in the implementation of projects. Today, as projects in the energy sector, especially renewable projects, are on the increase and also we are facing resource constraint in the implementation of projects, using scheduling techniques to minimize delays and obtain more realistic project duration is necessary. Practical implications This research was carried out in a wind farm project. In spite of the initial plan duration of 142 days and average duration of previous similar projects of 146 days, the project was completed in 113 days. Originality/value This paper introduces a practical project buffer and resource management model for project resource leveling, project buffer sizing and buffer consumption monitoring to reach a more realistic schedule in energy sector. This study adds to the literature by proposing the PBRM model in renewable energy sector.
    • Regional electricity market integration - France - Belgium - Netherlands

      Meeus, Leonardo; Glachant, Jean-Michel; Belmans, Ronnie (Revue-E, 2006)
    • Regulated cross-border transmission investment in Europe

      Meeus, Leonardo; Purchala, K.; Van Hertem, Dirk; Belmans, Ronnie (European Transactions on electrical power, 2006)
      In a liberalized market, generation and transmission investment decisions are decoupled, so that more grid is necessary. The European transmission grid is the backbone of the internal electricity market that besides serving the market has to ensure security of supply and to allow connecting renewables. Transmission grid investments are clearly needed, especially to increase the scarcely available cross-border transfer capacities. The regulatory framework in which these investments are to take place is discussed in this paper. The authors evaluate whether the regulation that is already in place will deliver the investments crucial for the success of the liberalization process in Europe
    • Regulatory framework and business models for charging PEVs: infrastructure, agents, and commercial relationships

      Gómez, Tómas; Momber, Ilan; Rivier, Michel; Sánchez-Miralles, á. (Energy Policy, 2011)
    • Reliability options: Can they deliver on their promises?

      Bhagwata, Pradyumna C.; Meeus, Leonardo (The Electricity Journal, 2019)
      Capacity mechanisms have been controversial in theory as well as practice. Lessons from experience with different capacity mechanisms led to the development of the reliability options. This mechanism promises two advantages over other types of capacity mechanisms. Firstly, it ensures the availability of capacity contracted via the capacity mechanism during scarcity. Secondly, the reliability option mechanism limits any energy market distortion due to its implementation and provides the consumer a hedge from high prices. We assess the ability of reliability options in delivering the two promises by analysing the reliability option designs in Italy and Ireland. We find that they deliver on the first promise but only partly on the second.
    • Spillover effects of distribution grid tariffs in the internal electricity market: An argument for harmonization?

      Govaerts, Niels; Bruninx, Kenneth; Le Cadre, Hélène; Meeus, Leonardo; Delarue, Erik (Energy Economics, 2019)
      In many countries, distribution grid tariffs are being reformed to adapt to the new realities of an electricity system with distributed energy resources. In Europe, legislative proposals have been made to harmonize these reforms across country borders. Many stakeholders have argued that distribution tariffs are a local affair, while the European institutions argued that there can be spillovers to other countries, which could justify a more harmonized approach. In this paper, we quantify these spillovers in a simplified numerical example to give insight and an order of magnitude. We look at different scenarios, and find that the spillovers can be both negative and positive. To be able to quantify these effects, we developed a long-run market equilibrium model that captures the wholesale market effects of distribution grid tariffs. The problem is formulated as a non-cooperative game involving consumers, generating companies and distribution system operators in a stylized electricity market.
    • The implication of the European inter-TSO compensation mechanism for cross-border electricity transmission investments

      Hadush, Samson Yemane; De Jonghe, Cedric; Belmans, Ronnie (International Journal of Electrical Power & Energy Systems, 2015)
      An efficient cross-border investment and well-designed markets and regulatory instruments are crucial prerequisites to the creation of a fully functional European internal electricity market. One of the prominent regulatory measures taken to speed up the creation of the internal market was to abolish tariff pancaking by replacing cross-border tariffs with an Inter-Transmission System Operators Compensation (ITC) mechanism through which transmission system operators (TSOs) can compensate each other. In this study, the implication of introducing such mechanism on the cross-border investment outcome is explored. The results indicate that the current ITC mechanism is loosely linked to the cross-border investment decisions of TSOs. In addition, the study concludes that factors such as the ITC fund size and the number of participating TSOs can influence the investment outcome.
    • The next step in the Central Western European electricity market: cross-border balancing

      Vandezande, Leen; Meeus, Leonardo; Belmans, Ronnie (Revue-E, 2008)
      Following initiatives on the day-ahead and intra-day stage, a regional approach towards real-time balancing constitutes a logical next step in the process towards a single Central Western European electricity market. For the moment, balancing market designs still significantly differ between the countries of the region and a coordinated approach for cross-border exchange of balancing services is lacking. Further harmonisation and coordination efforts are consequently required to enable the implementation of a single cross-border balancing market in the region.
    • The regulatory experience of Italy and the United States with dedicated incentives for strategic electricity transmission investment

      Keyaerts, Nico; Meeus, Leonardo (Utilities Policy, 2017)
      There is a trend in regulatory practice towards providing dedicated incentives for strategic investments. Italy and the United States have the longest experience with authorizing returns and risk-mitigating incentives that deviate from standard regulatory treatment for policy purposes. In these countries, the regulatory incentives are based on a case-by-case assessment of capital projects. We find that the Italian scheme is simpler, which reduces administrative costs. The U.S. scheme is more advanced in the case-by-case assessment. Even though dedicated incentives may be controversial, our analysis of both experiences shows that, notwithstanding significant learning costs, both schemes have facilitated substantial financial investment in strategically important infrastructure.
    • Towards an international tradable green certificate system - The challenging example of Belgium

      Verhaegen, K.; Meeus, Leonardo; Belmans, Ronnie (Renewable and Sustainable Energy Reviews, 2009)
      In Europe, a common framework for renewable energy sources (RES) is aspired. Tradable green certificates (TGCs) are a market-based cost-efficient means to stimulate electricity production from RES. Since TGCs are the most widespread support scheme in Europe together with feed-in tariffs, chances are that a common European framework could well be based on TGCs. However, while integrating currently existing different national TGC systems, any remaining differences should be carefully considered. Just how difficult the creation of an international TGC market would be is illustrated in this paper by the case of Belgium, where no less than 4 different TGC systems exist nowadays. The example of Belgium illustrates that harmonizing different TGC systems is easier said than done and represents a serious challenge. This clearly illustrates that a single European support scheme for RES, however desirable, is still far in the future.
    • The welfare and price effects of sector coupling with power-to-gas

      Roach, Martin; Meeus, Leonardo (Energy Economics, 2020)
      Electricity markets with high installed capacities of Variable Renewable Energy Sources (VRES) experience periods of supply and demand mismatch, resulting in near-zero and even negative prices, or energy spilling due to surplus. The participation of emerging Power-to-X solutions in a sector coupling paradigm, such as Power-to-Gas (PTG), has been envisioned to provide a source of demand flexibility to the power sector and decarbonize the gas sector. We advance a long-run equilibrium model to study the PTG investment decision from the point of view of a perfectly competitive electricity and gas system where each sector's market is cleared separately but coupled by PTG. Under scenarios combining PTG technology costs and electricity RES targets, we study whether or not there is a convergence in the optimal deployment of PTG capacity and what is the welfare distribution across both sectors. We observe that PTG can play an important price-setting role in the electricity market, but PTG revenues from arbitrage opportunities erodes as more PTG capacity is installed. We find that the electricity and gas sector have aligned incentives to cooperate around PTG, and instead find an issue of misaligned incentives related to the PTG actor. Although not the focus of our analysis, in some scenarios we find that the welfare optimal PTG capacity results in a loss for the PTG actor, which reveals some intuition that subsidizing PTG can make sense to reduce the cost of RES subsidies. Sensitivity analyses are conducted to contextualize these findings for system specificities.
    • 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.