Energy Economics

Topics like the accomplishment of a single European energy market, consumer protection and further development of competition in energy markets are still important policy goals of the European commission and the EU member states. Central issues of research are appropriate support schemes, market design, competition policies and regulation of energy grids. Current activities in this field include markets and economic analysis as well as the role of market design regarding liberalisation processes, i.e. regulation and unbundling.

Main research

Markets and economic analysis

A main focus of our research is in the area of power grids. The debate about supply shortage management and grid expansion is growing in prominence. To a great extent, the overloading of the power grid is offset through Offshore-Wind energy. For transmission networks grid expansion and investments have been discussed for quite some time. In the context of the development of smart grids the debate is now becoming increasingly relevant for distribution networks.

Market design

Liberalisation and regulation: With the loss of the internal electricity market directive (1996) and the corresponding guidelines for the gas market (1997), the first steps were taken towards the liberalization of the European markets. Following these steps, the Federal Network Agency (BNetzA) was founded in 2005 and an ex ante regulation regime was introduced. The next element was the implementation of an incentive regulation in 2009. A focus of research is the analysis of the relationships between different forms of regulation (i.e. Revenue-Cap Regulations) and network investments. The actuality of this topic is emphasized by the discussion about an integrated quality regulation.

Unbundling: Ever since the EU commission published its Sector Inquiry and the draft for the 3rd Energy Directive early 2007, the unbundling of energy networks from other commercial businesses is a prominent topic. The current state of the discussion allows member states to choose between the following options:

  • Ownership unbundling and
  • Deep Independent System Operators, or
  • The "third way" or "efficient and effective unbundling"

The Bremer Energie Institut, as well as the Jacobs University, is deeply in this debate. Together with the universities in Bochum, Wien, Tilburg and Delft, we lead the interdisciplinary consortium UNECOM: Unbundling of Energy Companies.