Design and improve energy markets

An adequate market design is necessary to face the major changes ongoing in the energy sector triggered by decarbonation, decentralization, digitalization and energy market integration. A coordinated and coherent approach should be ensured in all markets, including balancing the market to guarantee supply security.

Increasing need for coordination due to decentralization and energy market integration

The energy landscape is experiencing profound transformations, especially with the development of smarter grids in response to higher renewable integration and production decentralization. This shift implies the development of more international projects and further TSO/TSO coordination. Decentralisation also implies improving TSO/DSO coordination requiring new definitions of their interactions, roles and responsibilities, as well as their tools and practices both at national and international scales.

In this context, grid operators are faced with the need to coordinate their initiatives for an efficient and safe system operation, and the need to leverage new opportunities. Flexibility could, for example, be unlocked on lower frequency levels based on a diverse portfolio of usages and equipment. Flexibility resources could also be shared between countries/regions to decrease the system’s costs and thus increase global social welfare.

Coupling between energy grids (power, H2, Gas, biomethane, …)

The transition towards integrated and decarbonized energy systems and the subsequent increasing share of variable energy sources necessitates designing new solutions to bridge the time gap between energy production and consumption. Coupling between energy grids represents a solution for higher grid flexibility and optimized decarbonization: it adds further power storage capacity through the transformation of renewable power into carbon-free or thermal energy (hydrogen, heat…) while allowing the substitution of fossil fuels with renewable gas (hydrogen, biomethane…).

This coupling of energy grids further complicates system operations. 

Reach carbon neutrality while ensuring safe grid operations and supply security

With the EU’s targets to reduce greenhouse gas emissions by 55% by 2030, and become carbon-neutral by 2050, it has become an urgent matter for European countries to transition towards climate-neutral societies requiring the development of a new set of rules and support mechanisms.

Cost-effective and efficient ways to achieve these targets are:

• Phasing out high-emission fossil fuels and replacing them with low-emission technologies and fostering higher renewable integration through the development of renewable generation and grid flexibility solutions.  
• The electrification of high-emission sectors such as transportation, building, and industrial sectors. 
• Introducing green gas to replace fossil fuels in the power, heat, and transport sectors, where electrification is inefficient or impossible.  

Sia Partners supports TSO, NEMOs and regulators in their Market Design projects. We intervene early in the process to provide strategic insights such as market analysis, future energy scenarios, and projections, to determine alternatives to current market designs, and to support the implementation and development of adequate tools and data to integrate these strategic insights into your business.