IEA EGRD Workshop - Future Energy Market Designs: Research and Innovation Needs
Experts' Group on R&D Priority Setting and Evaluation (EGRD)
Current energy market structures were designed to secure supply while at the same time they may create incentives to reduce overall costs of electricity production in an oligopolistic market. In the transition towards a low-carbon economy, global and local energy markets are undergoing profound changes.
The increase in renewable energy sources (RES) in the electricity grid has led to decentralized supply structures and a growing need for intelligent grids. The fluctuating character of RES requires further efforts to balance supply and demand in real-time with energy storage, demand-side management and managing electricity to/from other energy sectors such as transport, heating, or industries. There are also a growing number of small-scale actors entering the market including residential "prosumers" producing electricity with small-scale photovoltaics (PV), as well as intermediate-scale energy suppliers such as wind farms or biogas facilities.
These developments result in a more complex, dynamic and interdependent energy system and require constant adaptation of the laws and regulations to support worldwide climate goals. Enabling a smooth transition requires energy market (re-) design on the national level by governments and regulating bodies.
Research, development and demonstration (RD&D) can facilitate design of efficient and well-managed energy markets, understand the possible consequences of future energy market designs and to analyse the benefits - and challenges. For example, the interplay between a new energy technology and the energy network can be tested in large-scale or regional demonstration projects. Such showcase projects could provide a test bed for a number of technical, economical and regulatory challenges to integration of the technology, demonstrating model solutions which could then be deployed on a larger scale.
This workshop addred the following issues:
- Understanding the challenges, obstacles and risks
- Best practice examples and lessons learned
- New technologies and future business models
- Current research and future research needs
- R&D policies and decision making
An Executive Summary and Presentation Slides are available for Download on the IEA Website.
EGRD members and national experts as well as inputs from social scientists, behavioural economists, RD&D decision-makers, strategic planners and programme managers from industry, academia, think tanks, national laboratories, NGOs and government.