Nowadays, the European electricity systems are evolving towards a generation mix that is more decentralised, less predictable and less flexible to operate. In this context, additional flexibility is expected to be provided by the demand side. Thus, how to engage consumers to participate in demand response is becoming a pressing issue. In this paper, we provide an analytical framework to assess consumers' potential and willingness to participate in active demand response from a contract perspective. On that basis, we present policy recommendations to empower and protect consumers in their shift to active demand response participants.

a b s t r a c tThis 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 linepack 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.

The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Brigid Laffan since September 2013, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society.The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union. The series of working papers aims at disseminating the work of academics on the above-mentioned energy policy issues. For further information AbstractNowadays, the European electricity systems are evolving towards a generation mix that is more decentralised, less predictable and less flexible to operate. In this context, additional flexibility is expected to be provided by the demand side. Thus, how to engage consumers to participate in demand response is becoming a pressing issue. In this paper, we provide an analytical framework to assess consumers' potential and willingness to participate in active demand response from a contract perspective. On that basis, we present policy recommendations to empower and protect consumers in their shift to active demand response participants.

The gas system in Europe is facing increasing unpredictability due to the interactions with the electricity generation system. Indeed, gas fired power plants make up an important backup technology to deal with intermittency induced by wind-power integration. Therefore, the flexibility needs with respect to unpredictable power generation are actually transferred to the gas market. Applying the well-known electric power generation concepts of 'unit commitment' and 'dispatching' to the gas market, a hypothetical gastransmission system has been modeled to verify, first, the physical impact of wind power forecasting errors on the gas system, and, second, its effect on the organization of gas-imbalance settlement for non-market-based and market-based design options. Increasing unpredictability leads to more expensive physical balancing of the gas system. These costs should be borne as much as possible by those effectively causing them. From a regulatory point of view in the European context, cost recovery by means of non-market-based settlement faces the problem of defining an appropriate cost-neutral penalty that covers the balancing costs and incentivizes shippers. Market-based settlement relates the variable imbalance tariffs to the actual system imbalance and thus any factor that strongly impacts on the system state like unpredictability. However, this mechanism raises imbalance-settlement tariffs for all unbalanced gas network users, even if the major source of unpredictability is a clearly identifiable shipper. Keywords-gas balancing; gas-market regulation; wind power intermittency; gas system optimization 1 Open-cycle gas turbines (OCGT) are actually providing more dispatching flexibility as that technology allows even higher ramping rates than CCGTs. However, for the conceptual analysis in this paper, CCGTs have been chosen arbitrarily as the considered GFPP technology.

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