External publications

book-2572110

External publications / Bremen Energy Working Papers (BEWP)

11/2020
The European Green Deal’s Hydrogen Strategy and EU Energy Issues
Julia Kusznir & Karen Smith-Stegen
published in Baltic Rim Economies, Issue 4.

 

10/2020
The timing of monopoly investment under cost-based and price-based regulation
Jörg Borrmann & Gert Brunekreeft
published in Utilities Policy, Vol. 66, pp. 1-10.
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Abstract: This article contributes a theoretical analysis of the effects of different types of regulation on the timing of monopoly investment in a setting with lumpy capital investment outlays. Concentrating on the case where investment increases the regulatory asset base, we distinguish between price-based regulation and cost-based regulation. Under cost-based regulation, investment triggers a change of regulated prices, whereas, under price-based regulation, investment does not affect prices at all. Focusing on replacement investment due to wear and tear and expansion investment due to demand growth, our main conclusion is that cost-based regulation accelerates investment compared to price-based regulation..

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09/2020
OPEX-risk as a source of CAPEX-bias in monopoly regulation
Gert Brunekreeft & Margarethe Rammerstorfer
published in Competition and Regulation in Network Industries, December 2020.
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Abstract: This paper shows with a formal model that under monopoly regulation, OPEX-risk can be a source for a CAPEX-bias. If OPEX and CAPEX are substitutes, the regulated firm can reduce the risk of the firm and thereby reduce the true cost of capital by rebalancing OPEX and CAPEX. If the regulated rate-of-return on capital is not influenced by the firm’s actions, this creates a margin between the regulated rate-of-return and the true cost of capital; this causes a CAPEX-bias. We examine the so-called fixed-OPEX-CAPEX-share (FOCS), which is a variation of TOTEX-regulation, as a promising remedy to address the CAPEX-bias. We argue that FOCS is effective to address the CAPEX-bias, while it can easily be implemented.

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09/2020
Rethinking the Network Access Regime: The Case for Differentiated and Tradeable Access Rights
Christine Brandstätt and Rahmat Poudineh
published in Oxford Energy Forum Issue 124, pp. 24-28, September 2020.
Download on the website of Oxford Energy Forum.

 

09/2020
The Emergence of Output-Oriented Network Regulation
Gert Brunekreeft, Julia Kusznir, and Roland Meyer
published in Oxford Energy Forum Issue 124, pp. 34-38, September 2020.
Download on the website of Oxford Energy Forum.

 

08/2020
How decentralization drives a change of the institutional framework on the distribution grid level in the electricity sector – the case of local congestion markets
Marius Buchmann
published in Energy Policy Vol. 145, October 2020.
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Abstract: The increasing share of renewables in the electricity system results in congestion on all network levels. To address this congestion, the EU Commission proposed that distribution network operators become responsible for local congestion management. Within this paper we analyze the institutional implications of the introduction of local congestion markets and identify three discrimination concerns related to the DSO’s role on these markets. We will argue that the standard governance models (legal unbundling, ownership unbundling, IDSO) are not adequate here. Instead, we discuss two novel approaches: The introduction of Independent Distribution Operators (IDO) or alternatively, a Common Flexibility Platform (CFP). Since the CFP does not require stronger unbundling of DSOs, we recommend to investigate this solution further.

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07/2020
TOTEX Malmquist index for CPI-X regulation: Does it correctly estimate the true frontier shift?
Roland Meyer, Gert Brunekreeft & George Elias
published in Journal of Regulatory Economics 58, pp. 78–97(2020).
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Abstract: The X in CPI-X regulation aims to adjust price or revenue allowances to changes in total factor productivity and input prices. If calculated correctly, both terms together correspond to the change in efficient costs which can be determined by applying a cost Malmquist index. However, regulators typically lack the required data on input quantities and prices. As an alternative, regulation authorities may apply a TOTEX Malmquist index to measure the total cost change. We study under which conditions this total cost change correctly estimates the true efficient cost change. Overall, we conclude that the TOTEX Malmquist approach can be used for CPI-X regulation. However, regulators should be aware of the limitations and make adjustments in the implementation where necessary.

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02/2020
Smarter incentives for transmission system operators.
Oxera in collaboration with Gert Brunekreeft et al.
Study prepared for TenneT, July 2018.
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Abstract: Most regulatory systems for transmission operators in Europe focus strongly on the construction and remuneration of assets. However, the role of a transmission system operator (TSO) is much broader than this. Incentives provided by the regulatory system need to reflect that breadth. TSOs need to balance several inputs and outputs in a way that, ideally, would be beneficial to society. In order to give the TSO the opportunity to maximise ‘social welfare’,financial incentives should cover all their relevant inputs and outputs. In turn, these incentives should be balanced and aligned. The report provides a high-level review of existing TSO incentives, and proposes two alternatives for regulatory reform that could improve the performance of TSOs in the delivery of their main roles or functions.

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12/2019
The Negotiations between Ukraine and Russia on Gas Transit: A Progress Report
Julia Kusznir
published in Russian Analytical Digest, Issue 242, pp. 12-16.
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Abstract: The contract between Ukraine and Russia concerning gas transit expires at the end of 2019. Negotiations
for a new contract have been going on for quite some time. Despite the European Union’s mediation, different interests, viewpoints and hurdles have so far prevented the signing of a new treaty. This article analyses the progress of the ongoing negotiations, their goals and results, and discusses possible further developments in Ukrainian–Russian gas relations..

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10/2019
Assessment of the drafted German Integrated National Energy and Climate Plan
Marius Buchmann, Julia Kusznir & Gert Brunekreeft
published in Economics and Policy of Energy and the Environment, Issue 1, pp. 85-96.
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Abstract: Germany is struggling to meet its 2020 greenhouse gas (GHG) emission and climate goals. Against this background, we analyze the current draft National Energy and Climate Plan (NECP) that sets out how Germany aims to achieve its national and European climate goals by 2030. We introduce the current stage of the country’s climate policy and, by looking at the different emission reduction measures under discussion, examine why Germany will probably miss its CO2 emissions reduction goals. We conclude that, based on the climate package announced in September 2019, Germany will get closer to the achievement of its 2030 targets than was anticipated in the NECP draft; nevertheless, the new climate package leaves a significant gap between the new measures and the 2030 climate goals.

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08/2019
Effects of a Delayed Expansion of Interconnector Capacities in a High RES-E European Electricity System.
David Ritter, Roland Meyer, Matthias Koch, Markus Haller, Dierk Bauknecht, and Christoph Heinemann
published in Energies 2019, 12(16), 3098.
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Abstract: In order to achieve a high renewable share in the electricity system, a significant expansion of cross-border exchange capacities is planned. Historically, the actual expansion of interconnector capacities has significantly lagged behind the planned expansion. This study examines the impact that such continued delays would have when compared to a strong interconnector expansion in an ambitious energy transition scenario. For this purpose, scenarios for the years 2030, 2040, and 2050 are examined using the electricity market model PowerFlex EU. The analysis reveals that both CO2 emissions and variable costs of electricity generation increase if interconnector expansion is delayed. This effect is most significant in the scenario year 2050, where lower connectivity leads roughly to a doubling of both CO2 emissions and variable costs of electricity generation. This increase results from a lower level of European electricity trading, a curtailment of electricity from a renewable energy source (RES-E), and a corresponding higher level of conventional electricity generation. Most notably, in Southern and Central Europe, less interconnection leads to higher use of natural gas power plants since less renewable electricity from Northern Europe can be integrated into the European grid.

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06/2019
The Impact of EU Regulations and Western Sanctions on the Nord Stream 2 Project
Julia Kusznir
published in Russian Analytical Digest, Issue 236, pp. 8-12.
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Abstract: The Nord Stream 2 project, signed by the Russian state-owned energy company Gazprom and several Western energy companies in 2015, will offer additional supply capacities for Russian natural gas deliveries to Europe and has the potential to bring Ukraine’s role as a transit country to an end. EU competition regulation, Western sanctions and opposition from national governments challenge the completion of the project. This contribution analyses the perspectives of the Nord Stream 2 pipeline project in the light of EU regulations and Western sanctions and evaluates to what extent they impact on its progress so far

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08/2018
Energy security and energy transition: Securitisation in the electricity sector
K. Szulecki & Julia Kusznir
published in Szulecki, K. (Ed.), Energy Security in Europe. Divergent Perceptions and Policy Challenges. Palgrave Macmillan, 2018, pp. 117-148.

 

07/2017
The Need for Competition between Decentralized Governance Approaches for Data Exchange in Smart Electricity Grids - Fiscal Federalism vs. Polycentric Governance
Marius Buchmann
published in The Journal of Economic Behavior and Organization, 139, 106-117.
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Abstract: The institutional framework of the electricity sector is challenged by digitalization. With smart metering, data on energy consumption and production becomes available. Information management shall secure the efficient exchange of this data (e.g. from smart metering) in smart grids. Currently, national as well as regional governance approaches for information management systems are being developed. We discuss how the scale and scope of an information management system has an influence on the level of innovation in the process of the data exchange. We define information management as a club good and apply the insights from the theory of fiscal federalism. We conclude that neither of the extremes of national (central) and decentralized governance approaches for information management will be optimal. Rather, we identify the need of polycentric governance approaches that compete with each other to define the optimal degree of decentralization.

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07/2017
Regulatorischer Umgang mit Multi-Use-Speichern in Stromverteilnetzen – Ein Drei-Stufen-Modell
Roland Meyer, Gert Brunekreeft, Martin Palovic, and Daniel Speiser
published in ew–Das Magazin für die Energiewirtschaft, Nr. 6, 2017, pp. 51-53
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02/2017
Governance of data and information management in smart distribution grids: Increase efficiency by balancing coordination and competition
Marius Buchmann
published in Utilities Policy, Vol. 44, 2017, 63-72.
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Abstract: Smart grids should increase efficiency by enhancing coordination at the electricity distribution grid level and facilitating new market competition for services on a level playing field. Information management has become a new task in the electricity supply chain and an essential component of smart grids. Governance of information management should balance the goals of coordination and competition. Based on the analysis in this paper, existing participants in the electricity supply chain and the corresponding governance approaches appear to be unsuited to this goal and new governance approaches and roles are needed.

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12/2016
New Developments in Electricity Markets Following Lage-Scale Integration of Renewable Energy
Gert Brunekreeft, Marius Buchmann, and Roland Meyer
In: Finger, M. and Jaag, Chr. (editors), The Routledge Companion to Network Industries, Routledge Companions, 2016.

 

08/2016
Die Ermittlung des technologischen Fortschritts anhand von Unternehmensdaten – Der Einsatz der Malmquist-Methode im deutschen Regulierungsrahmen".
Stephan Vaterlaus, Yves Schneider, George Elias, Gert Brunekreeft, and Roland Meyer
Final Report, 2016
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08/2016
Towards a common EU Energy Policy? Debates on Energy Security in Poland and Germany
Heinrich A., Kusznir, J., Lis, A., Pleines, H., Smith Stegen, K. Szulecki, K.
published in ESPRi Policy Paper, Issue 2.
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The recently proposed overarching concept of a European “Energy Union” stresses the importance of regional cooperation, as it has become clear that absent increased coordination and cross-border cooperation, more obstacles than synergies may emerge. Looking at Germany and Poland, this policy brief examines how discrepancies between European Union (EU) member states’ understanding and articulation of energy security impede the development of a common European energy policy.

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06/2016
Integrating Stakeholders into the Governance of Data Exchange from Smart Metering
Marius Buchmann
published in Competition and Regulation in Network Industries, Vol. 17, Issue 2, pp. 102-122.
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Abstract: The electricity supply chain is changing due to the integration of renewable energies. Two developments are in the focus of this paper: First, the emergence of third parties and second, the requirement for information management (i.e. the management of data exchange from smart metering) as a new step in the supply chain. Information management needs to secure the neutral and non-discriminatory integration of third parties into smart grids. This can be accomplished by a collaborative governance approach. Based on veto player theory we identify two key issues for the voting process within a collaborative governance approach for information management. First, we show that a voting process based on “individual veto players” will result in governance lock-in situations, where governance innovation will be impeded. Second, we discuss that “collective veto players” can secure governance innovation for information management, but that the non-discriminatory integration for third parties might be at stake, if less than a qualified majority is required to vote on a veto.

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04/2016
The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany
Gert Brunekreeft, Marius Buchmann, and Roland Meyer
published in The Energy Journal, Vol. 37, Bollino-Madlener Special Issue, pp. 243-262.
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01/2016
Balancing between competition and coordination in smart grids - a Common Information Platform (CIP)
Christine Brandstätt, Gert Brunekreeft, Marius Buchmann, & Nele Friedrichsen
Economics, Energy & Environmental Policy, Vol. 6, No. 1.
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Abstract: The commercial value added in electricity distribution networks and smart grids is increasing. Concerns about competition on a level-playing field are raised. The debate on vertical network unbundling is reaching the distribution networks. Primary driver for this discussion is the requirement to exchange information in smart grids in a neutral and non-discriminatory way. Against the background of the unbundling discussion for distribution networks, we introduce a new approach: the Common Information Platform (CIP). The CIP tries to balance better between competition and coordination. The CIP adds two new dimensions. First, it "unbundles" information and data management as the key step in the value chain. Correspondingly, the CIP avoids such drastic measures as network ownership unbundling and legal unbundling will suffice. Second, it does not "separate" information and data management from the sector, but rather involves third parties in the rule-making process; the governance structure is "common" instead of "independent".

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