Gas Market Distorting Effects of Imbalanced Gas Balancing Rules: Inefficient Regulation of Pipeline Flexibility

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Show simple item record KEYAERTS, Nico HALLACK, Michelle GLACHANT, Jean-Michel D’HAESELEER, William 2011-02-01T13:10:10Z 2011-02-01T13:10:10Z 2010
dc.identifier.citation Energy Policy, 2010, 39, 2, 865-876 en
dc.identifier.issn 1873-6777
dc.identifier.issn 0301-4215
dc.description.abstract This paper analyzes the value and cost of line-pack flexibility in liberalized gas markets through examination of the techno-economic characteristics of gas transport pipelines and the trade-offs between different ways to use the infrastructure: transport and flexibility. Line-pack flexibility is becoming increasingly important as a tool to balance gas supply and demand over different periods. In the European liberalized market context, a monopolist unbundled network operator offers regulated transport services and flexibility (balancing) services according to the network code and balancing rules. Therefore, gas policy makers should understand the role and consequences of line-pack regulation. The analysis shows that the line-pack flexibility service has an important economic value for the shippers and the TSO. Furthermore, the analysis identifies distorting effects in the gas market due to inadequate regulation of line-pack flexibility: by disregarding the sunk costs of flexibility in the balancing rules, the overall efficiency of the gas system is decreased. Finally, the analysis demonstrates that the actual costs of line-pack flexibility are related to the peak cumulative imbalance throughout the balancing period. Any price for pipeline flexibility should, therefore, be based on the related trade-off between the right to use the line-pack flexibility and the provision of transport services.
dc.format.mimetype application/pdf
dc.language.iso en en
dc.rights info:eu-repo/semantics/openAccess
dc.title Gas Market Distorting Effects of Imbalanced Gas Balancing Rules: Inefficient Regulation of Pipeline Flexibility en
dc.type Article en
dc.identifier.doi 10.1016/j.enpol.2010.11.006
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