Market designs are not “carved in stone and should evolve with the energy transition” according to the head of European electricity group Eurelectric.
Writing for Power Engineering International, Hans ten Berge says that in the short to medium term, “the critical challenges are to foster the competitiveness of low-carbon technologies, to allow for the development of flexible solutions, to ensure that the market provides price signals adequate for existing assets and investments, and to avoid structural over or undercapacity, thus ensuring security of supply in a cost-efficient way”.
In a guest blog which asks ‘What is the best electricity market design of the future?’, the secretary-general of Eurelectric arugues that to allow for the energy revolution to be carried out in the most cost efficient way, “customers, energy companies and policymakers have the responsibility to help designing a regulatory framework and adequate governance which is adapted to the needs of the moment, forward-looking and able to flexibly adjust to the challenges ahead. Technology is clearly leading the way, all the others should be able to cope.”
He says that in the coming decades “empowered customers will play a crucial role”.
“Using the most modern technologies such as heat pumps, electric vehicles, home management systems and connected objects, customers will have unprecedented control over their energy use.
“The need to integrate increasing shares of variable renewable energy sources into the system makes demand side flexibility more and more relevant. These developments require clear rules which enable participation of customers in the market and a fair competition between all resources, such as generation, demand response and storage.”
And he argues that to “effectively make the market fit for renewables, we must ensure the full integration of day-ahead, intraday and balancing markets, and implement shorter gate closure. Wholesale prices must also be allowed to adequately reflect scarcity, thus helping to provide investment signals that can be trusted by market participants.”