Dispatch Hubs
Client: Elia / 50Hertz
Neon team: Lion Hirth
Published: 2021
Transmission grid congestion is widespread in Europe, but splitting bidding zones has been politically deadlocked for years, with the EU bidding zone review leading nowhere. Against this backdrop, Belgian TSO Elia proposed dispatch hubs — small, flexible zones within existing bidding zones. For Elia and 50Hertz, we helped develop the concept further, focusing on a crucial question: whether and how market parties should be compensated for being moved into a hub. Drawing on our expertise in incentives, we assessed eight alternative compensation options. A core problem is avoiding incentives to bid strategically while limiting the overall cost of compensation — a fundamental trade-off that cannot be fully resolved. We recommended cost-based compensation that is independent of actual bidding behavior.
Dr. Ingmar Schlecht
schlecht@neon.energy
+49 177 86 33 526
