Gerd Küpper - Academia.edu (original) (raw)

Papers by Gerd Küpper

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SSRN Electronic Journal, 2010

This paper studies strategic incentives to invest in electricity generation capacity using a loca... more This paper studies strategic incentives to invest in electricity generation capacity using a local fuel like renewables or coal. It shows that investing in this capacity, even if not used, improves the bargaining position of a power producing firm that also imports another fuel such as gas. When several importers are considered, the paper finds that investment has a positive strategic effect on all other importers' bargaining position. A government energy policy that forces utilities to invest in capacity based on particular fuels can be justified not only for environmental but also for strategic reasons.

SSRN Electronic Journal, 2007

This paper studies the welfare implications of using market mechanisms to allocate transmission c... more This paper studies the welfare implications of using market mechanisms to allocate transmission capacity in recently lib eraliz ed electricity markets. It q uestions whether access to this essential facility should b e traded on a market, or whether the incumb ent should retain ex clusiv e usage rights. W e show that granting ex clusiv e use to the incumb ent might b e optimal, if the capacity of the essential facility is small and the incumb ent can reduce production costs b y taking adv antage of interregional production-cost diff erences. This result counters the intuition that arb itrage will improv e the social surplus when there is no output contraction. The reason is that when competition is imperfect, arb itrage might reduce production effi ciency. W e adv ise policy makers to introduce market mechanisms for the allocation of transmission capacity only if suffi cient inv estment in the network is ensured or if the market power of the incumb ent is b roken in at least one of the markets in which it is activ e.

The Electricity Journal, 2009

From a national market perspective, taking transmission capacity into account reduces current con... more From a national market perspective, taking transmission capacity into account reduces current concentration measures, although they remain fairly high even after substantial capacity increases. From an international perspective, a more efficient use of current transmission capacity by coupling regional markets can increase competition. That suggests it may not be appropriate to assess market concentration using national market shares.

2009 6th International Conference on the European Energy Market, 2009

Cross border capacity allows electric energy to be traded internationally. The electricity sector... more Cross border capacity allows electric energy to be traded internationally. The electricity sector used to be vertically integrated and often state-owned. High voltage grids were generally developed within the borders of a country. Connecting different national high voltage grids was done to improve the security of the system and to accomodate for a few historical long term contracts. By doing so, the different systems could share their reserve generation capacity. Since the liberalization of the electricity sector, cross border capacity has gained a renewed interest as this can increase the competition in the market. This paper aims to give an overview of recent and planned investments which increase the cross border capacity of Belgium. Also we give an insight into the different technologies which can be used and their advantages and drawbacks are discussed. Index Terms-Cross border capacity, transmission investments, overhead lines, phase shifting transformer, HVDC

The Energy Journal, 2010

During the last decades the production of electrical energy has been liberalized. This paper stud... more During the last decades the production of electrical energy has been liberalized. This paper studies the effect of using a market mechanism to allocate scarce transmission capacity when the incumbent producers remain dominant. We show that granting exclusive use to an incumbent producer is preferred to trading access to this essential facility if interregional productioncost differences are significant and transmission capacity is scarce. This result counters the intuition on third degree price-discrimination, that arbitrage will improve the social surplus when there is no output contraction. The reason is that with arbitrage the incumbent can still charge different regional prices as long as it creates congestion on the transmission lines. As a consequence, welfare will be lower, since the incumbent distorts production decisions to congest the lines.

Proceedings of the …, 2008

Page 1. - 1 - Increasing competition in the Belgian electricity market Does more international tr... more Page 1. - 1 - Increasing competition in the Belgian electricity market Does more international transmission capacity help? by Gerd Küpper, Erik Delarue, Bram Delvaux, Leonardo Meeus, David Bekaert, Bert Willems, Stef Proost ...

CIRED - Open Access Proceedings Journal, 2020

The European Commission's long-term strategy envisages a carbon neutrality of the economy by 2050... more The European Commission's long-term strategy envisages a carbon neutrality of the economy by 2050. There is a general consensus that in this context, a high share of renewable power generation will be photovoltaic-and windbased. This has two implications for the power market functioning: (i) the energy system becomes necessarily more decentralised while current markets, based on a zonal representation of the transmission network, are not able to capture this dimension. This study provides an overview on key choices to be made when designing local markets. (ii) Also the study raises the question whether markets dominated by intermittent renewable energy source can be organised in a decentral way (current reference in European power markets) or whether some level of centralisation (as typically in most of US markets) is required to coordinate market and network operation.