As the energy sector undergoes transformation driven by sustainability objectives, the electrification of both citizen and industrial processes is creating a more complex energy ecosystem. This evolution brings new opportunities for companies to play a significant role in energy management. For example, addressing congestion issues on the distribution grid and ensuring a balanced network at the transmission level are becoming increasingly challenging. Such challenges open the door for actors capable of providing services that maintain grid stability, in exchange for financial compensation for the technologies and solutions they offer.
Yet, the emergence of these new players raises critical questions: How do their services affect overall system operations? Do all actors benefit from their involvement? And what are the potential economic and legal implications of their activities?
To address these questions, within the framework of the ECOFLEX project, Ting Chen and Frederik Vandendriessche, from the University of Ghent, analyze the costs and benefits associated with the role of energy management service providers (EMSPs).
In a broad sense, the costs and benefits of a certain measure can be assessed from both economic and legal perspectives. Economic and legal cost-benefit analyses differ fundamentally in purpose, methodology, and normative orientation. They both are relevant to a cost-benefit analysis of the role of an energy management service provider (EMSP). This analysis first clarifies the various contexts and approaches to applying economic and legal cost-benefit analyses. It then identifies and classifies the costs and benefits created by introducing an EMSP while also determining which categories of costs and benefits are relevant to economic and legal cost-benefit analysis. On this basis, the authors’ analysis respectively applies economic and legal cost-benefit analytical frameworks to evaluate whether it is efficient and proportionate to introduce a separate market player for energy management services.