Seventh issue of Gentse Economische Inzichten

(24-02-2023)

Today the seventh issue of Gentse Economische Inzichten (Ghent University Economic Insights) has been published. Gentse Economische Inzichten is a forum for the broad societal dissemination of research findings and policy recommendations by researchers of the Department of Economics of Ghent University. Given that this forum focusses on the Flemish community, the Gentse Economische Inzichten are published in Dutch.

In this issue, based on recent peer-reviewed scientific research, we discuss four recommendations for a stable and sustainable electricity market.


These are the most important insights:

  1. The current electricity market design is the result of a decades-long process that has created a considerable amount of welfare.
  2. Four key pillars of the market design work well and need no improvement:
    • Unbundling of generation, transmission and retail
    • Marginal pricing
    • The sequence of markets at different time scales
    • Market coupling between regions
  3. We make four recommendations to improve the market design:
      • Continue to implement the fourth energy package (2019)
      • Improve price stability for consumers and producers using:

i) Contracts for differences

ii) Capacity payments

iii) Power purchasing agreements

iv) Long-term contracts for smaller consumers

v) Citizen participation in renewable energy projects

vi) Creation of a "long-term electricity contracts company"

      • Make electricity demand more flexible through automation
      • Improve the coordination of the energy transition

Read the full seventh issue of Gentse Economische Inzichtenpdf