Erik Delarue

KU Leuven | ku leuven · Department of Mechanical Engineering

This paper explores the economic justifications for policies to support climate-neutral hydrogen production, focusing on their interaction with energy markets and cap-and-trade systems such as the EU emission trading scheme. To investigate these issues, we develop and deploy a state-of-the-art equilibrium model that captures the interactions betwee...

Policy makers are formulating offshore energy infrastructure plans, including wind turbines, electrolyzers, and HVDC transmission lines. An effective market design is crucial to guide cost-efficient investments and dispatch decisions. This paper jointly studies the impact of offshore market design choices on the investment in offshore electrolyzers...

The REpowerEU plan prioritizes combining electrification with low-carbon hydrogen for a green energy shift. However, uncertainties surrounding the future hydrogen market and its supply costs impede the establishment of its value chain. Without definite plans for hydrogen production and infrastructure, investing in low-carbon hydrogen industrial pro...

Direct addition of external heat into electrolysers can reduce the electrical power required for carbon-neutral hydrogen production. The efficient operation of such electrolysers requires detailed operational models that capture the availability of heat and consider its impact on startup costs. This paper improves existing electrolyser operational...

While capacity remuneration mechanisms are emerging around the globe, a variety of capacity demand curves is being used. Poorly tuned capacity demand curves can, however, lead to expensive over- or underprocurement of capacity. This work provides a methodology to directly compare different capacity demand curve design methodologies, accurately refl...

Battery Energy Storage Systems (BESS) may exploit the increasing price volatility in imbalance settlement mechanisms via inter-temporal arbitrage. However, participating in these markets requires a careful trade-off between expected profits, accounting for the impact of BESS actions on prevailing imbalance prices, the financial risks and the incurr...

Distribution System Operators (DSOs) in Europe increasingly employ flexibility markets to manage overloaded grid lines or transformers. One of the main concerns is that grid users will use these flexibility markets to deliberately create and solve congestion, also known as inc-dec gaming. However, the relevance of this game has not yet been explore...

To avoid unnecessary distribution network investments, distribution tariffs are expected to become more cost-reflective, and DSOs are expected to procure flexibility. This will provide an implicit and an explicit incentive to provide demand-side flexibility. In this paper, we develop a long-term bi-level equilibrium model. In the upper level, the D...

Liberalized electricity markets promise a cost-efficient operation and expansion of power systems but may as well introduce opportunities for strategic gaming for price-making agents. Given the rapid transition of today’s energy systems, unconventional generation and consumption patterns are emerging, presenting new challenges for regulators and po...

Carbon Contracts for Difference (CCfD) are proposed as a complementary climate policy instrument to incentivise industrial decarbonization projects and mitigate financial risks. They can serve as both a de-risking instrument and a subsidy for projects such as the electrification of industrial heat and the use of hydrogen for the refining of metals...

The economic efficiency of distribution network tariffs may be enhanced by applying marginal cost pricing principles. This paper investigates the Long-Run Incremental Cost (LRIC) methodology, a marginal cost-based approach that has been applied in Great Britain since 2012. The long-term social welfare achieved under a coincident peak tariff set acc...

The European Union’s green deal and European Climate law have set a target for the EU to become climate neutral by 2050. The transition to climate neutrality must be balanced with other priorities such as energy security to strengthen the EU’s industry and energy system to create a level playing field in comparison with other countries outside the...

In liberalized electricity markets, empirical findings suggest that power plant investment decision-making under uncertainty exhibits bounded rationality. This study leverages the Nobel-prize-winning theory-prospect theory-to evaluate the impact of various bounded rational elements on electric power system transition. Results show that boundedly ra...

In competitive electricity markets the optimal trading problem of an electricity market agent is commonly formulated as a bi-level program, and solved as mathematical program with equilibrium constraints (MPEC). In this paper, an alternative paradigm, labeled as mathematical program with neural network constraint (MPNNC), is developed to incorporat...

In competitive electricity markets, the optimal bid or offer problem of a strategic agent is commonly formulated as a bi-level program and solved as a mathematical program with equilibrium constraints (MPEC). If the lower-level part of the problem can be well approximated as a convex problem, this approach leads to a global optimum. However, electr...

In this paper, we investigate two schemes for contracting demand-side flexibility by the Distribution System Operator (DSO) at the planning stage: a voluntary demand-side connection agreement where consumers offer their flexibility and a mandatory demand-side connection agreement where the DSO sets the flexibility levels. For both schemes, we devel...

This paper formulates an energy community’s centralized optimal bidding and scheduling problem as a time-series scenario-driven stochastic optimization model, building on real-life measurement data. In the presented model, a surrogate battery storage system with uncertain state-of-charge (SoC) bounds approximates the portfolio’s aggregated flexibil...

The EU endeavors to stimulate the use of renewable energy cooperation mechanisms. These cooperation mechanisms can significantly reduce the policy cost for meeting renewable targets. Several authors, however, have raised concerns that such cooperation mechanisms can be subject to efficiency losses due to different national regulatory conditions, an...

Both risk-averse behavior and strategic bidding may distort the outcome of energy and capacity markets. Although these two behavioral aspects may trigger similar bidding behavior and investments into generation capacity, they are fundamentally different. While in the literature risk-aversion and strategic behavior have been investigated separately,...

div>This paper formulates an energy community's centralized optimal bidding and scheduling problem as a time-series scenario-driven stochastic optimization model, building on real-life measurement data. In the presented model, a surrogate battery storage system with uncertain state-of-charge (SoC) bounds approximates the portfolio's aggregated flex...

In competitive electricity markets the optimal trading problem of an electricity market agent is commonly formulated as a bi-level program, and solved as mathematical program with equilibrium constraints (MPEC). In this paper, an alternative paradigm, labeled as mathematical program with neural network constraint (MPNNC), is developed to incorporat...

In the face of growing balancing requirements, there is increased interest in cross-border coordination of balancing capacity markets. Despite improved coordination of balancing energy, only limited progress has been made on coordinating balancing capacity procurement and sizing. That is in part because the coordination of procurement and sizing is...

In competitive electricity markets the optimal trading problem of an electricity market agent is commonly formulated as a bi-level program, and solved as mathematical program with equilibrium constraints (MPEC). In this paper, an alternative paradigm, labeled as mathematical program with neural network constraint (MPNNC), is developed to incorporat...

div>This paper formulates an energy community's centralized optimal bidding and scheduling problem as a time-series scenario-driven stochastic optimization model, building on real-life measurement data. In the presented model, a surrogate battery storage system with uncertain state-of-charge (SoC) bounds approximates the portfolio's aggregated flex...

While on-going and future developments will likely increase the short-term elasticity of the electricity demand, capacity markets are often put forward as a possible remedy to ensure generation adequacy. In this paper, we provide a model formulation of a stochastic non-cooperative capacity planning problem reflecting short-term elastic energy deman...

An important aspect of long-term power system planning models is their adequacy awareness, i.e., their ability to ensure generation adequacy in the final solution, which in turn strongly depends on the level of temporal detail included in the model structure. To maintain computational tractability, the temporal detail included in long-term planning...

In competitive electricity markets the optimal trading problem of an electricity market agent is commonly formulated as a bi-level program, and solved as mathematical program with equilibrium constraints (MPEC). In this paper, an alternative paradigm, labeled as mathematical program with neural network constraint (MPNNC), is developed to incorporat...

In competitive electricity markets the optimal trading problem of an electricity market agent is commonly formulated as a bi-level program, and solved as mathematical program with equilibrium constraints (MPEC). In this paper, an alternative paradigm, labeled as mathematical program with neural network constraint (MPNNC), is developed to incorporat...

The cost-efficient integration of variable renewable power (vRES) requires adequate operating reserve and energy markets. This paper focusses on the benefits of increasing the temporal granularity of joint energy-operating reserve markets in a case study on two high-vRES systems. Specifically, the impact of the frequency (i.e., how often reserves a...

The emergence of prosumers calls for a revision of distribution network tariff design to ensure efficient network utilization and optimal customer response. This article aims to investigate the influence of different distribution tariff structures and peer effects on both residential consumers’ distributed energy resources adoption and the allocati...

To reduce the computation time of Energy System Optimization Models and Generation Expansion Planning Models operational detail is typically limited to several hours, days, or weeks in a year selected using Time Series Aggregation methods. We compare time series aggregation methods and generation expansion planning models which aim to capture the v...

div>This paper presents new risk-based constraints for the participation of an energy community in day-ahead and real-time energy markets. Forming communities offers indeed an effective way to manage the risk of the overall portfolio by pooling individual resources and associated uncertainties. However, the diversity of flexible resources and the r...

div>This paper presents new risk-based constraints for the participation of an energy community in day-ahead and real-time energy markets. Forming communities offers indeed an effective way to manage the risk of the overall portfolio by pooling individual resources and associated uncertainties. However, the diversity of flexible resources and the r...

Many regulators are pushing for more cost-reflective distribution network charges to inform end users of the grid infrastructure costs their behavior causes. Since future investment costs can be avoided by reducing simultaneous peak loads, forward-looking, coincident peak charges are often proposed. Under the assumption of convex network costs, it...

Distribution system operators are expected to procure flexibility when it is cheaper than expanding their distribution grid. How to integrate these flexibility markets in the existing sequence of electricity markets is an important open issue in the evolution of electricity markets in Europe. In this paper, we investigate four market sequencing opt...

Capacity credits, i.e., metrics that describe the contribution of different technologies in meeting the load during peak periods, are widely used in the context of long-term energy-system optimization models to ensure a pre-defined level of firm capacity. In the same vain, such capacity credits may be used in capacity markets to reflect the availab...

Distributed energy resources (DERs) may enable prosumers to deliver demand response under dynamic energy pricing schemes. Facing wholesale market prices, the DER scheduling of a profit-maximising prosumer minimises the total system energy cost as well. However, regulated electricity bill components, i.a., distribution tariffs for recovering grid co...

Trading electricity across market zones furthers competitive power prices, security of supply and the integration of renewable energy. In the European Union, flow-based market coupling is the target model to compute correct trading capacities between markets, while approximating physical grid constraints. The methodology relies on predictive, caref...

Long-term electric power system planning models are frequently used to provide policy support in the context of the ongoing transition towards a low-carbon electric power system. In a liberalized market, this transition relies on generation company investment decisions. These decisions are shaped by both economic and behavioral factors. Agent-based...

Trading electricity across market zones furthers competitive power prices, security of supply and the integration of power generation from renewable energy sources. However, trade is limited by the physical properties of the electricity grid. As a target model in the EU, flow-based market coupling is the currently preferred method to compute correc...

Markets for electric energy and reserves are linked as the same physical assets operate in both markets. Two different designs are commonly used for clearing energy and reserve markets; joint clearing or sequential clearing. It’s generally accepted that joint clearing results in higher (or at least the same) social welfare than a pure sequential cl...

We aim to provide an overview of renewable subsidy schemes, thereby focusing on renewable investment incentives and cost effects in a uniformly-priced market zone. Specifically, we develop a deterministic short-term market equilibrium model that allows to investigate both siting and technological distortions in onshore wind turbine deployment. This...

Many regulators are pushing for more cost-reflective distribution network charges to inform end users of the grid infrastructure costs their behavior causes. Since these costs are largely driven by simultaneous peak loads, coincident peak pricing is often proposed in this context. Under the assumption of convex network costs, it has been shown that...

The possibly increasing volatile gas off-take from gas-fired power plants to accommodate volatile renewable generation in combination with the integration of power-to-gas (P2G) warrants further study into the operation of a coupled electrical power and natural gas system. Therefore, this paper presents and validates a novel operational model compri...

Demand-side flexibility can be incentivised to reduce the need for investment in distribution grids either implicitly or explicitly. Implicit demand-side flexibility is when prosumers react to price signals triggered by network tariffs. Explicit demand-side flexibility is when the DSO can contract flexibility. In this paper, we focus on one contrac...

To cope with the variability and uncertainty introduced by, i.a., intermittent renewable energy sources, the flexible planning and operation of generation units is crucial. Their reaction time is constrained by the lead times on the start-up decisions, whereas the demand for flexibility and operating reserves depends on the market clearing frequenc...