 Forum shopping for ex-post gas-balancing servicesNico Keyaerts and William D'haeseleer Energy Policy, 2014, vol. 67, issue C, 209-221 Abstract: The patchwork of different imbalance-settlement rules in geographically adjacent gas regions induces shippers to go “forum shopping” to minimize costs of ex-post balancing services. This shopping increases efficiency, and thus welfare of the shippers, on the one hand. The impact on net efficiency is dependent on the relative incentives provided by different balancing mechanisms and the relative system-balancing costs that the transmission-system operators face to offer balancing services to unbalanced shippers, on the other hand. If the gas-balancing mechanism and the system-balancing costs are aligned, net efficiency in the combined gas system will rise. Our results demonstrate that such an outcome is not guaranteed. Hence, market integration without properly checking compatibility of balancing rules can improve shipper efficiency at the cost of reducing overall efficiency. The latter outcome should clearly be avoided by policy makers and European regulators whose primary concern should be overall efficiency as this provides fair and efficient prices for gas consumers and a higher utility for society. Keywords: Efficiency; Gas balancing; Cross-border regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:67:y:2014:i:c:p:209-221 DOI: 10.1016/j.enpol.2013.11.062 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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