Professor Marc Oliver Bettzüge

Professor Marc Oliver Bettzüge

Professor Marc Oliver Bettzüge

Professor Marc Oliver Bettzüge is full Professor of Economics, in particular energy economics, and Head of the Chair of Energy Economics in the Department of Economics at the University of Cologne. He is also Managing Director and Chairman of the Management Board of the Institute of Energy Economics at the University of Cologne (EWI).

Interview with Professor Marc Oliver Bettzüge

What do you find most interesting about the Erasmus Centre for Future Energy Business?

Professor Wolf Ketter from the Erasmus Centre for Future Energy Business in Rotterdam recently gave a presentation at the Institute of Energy Economics in Cologne. Although we come from different disciplines, there might be opportunity for collaboration. Being an energy economist I also observe changes in the energy market due to liberalisation and the growing share of renewable energy. Furthermore there is an increasing number of participants and decision-makers in the energy market, especially at the level of small-scale generation units. Wolf Ketter looks at the energy market with a focus on the decisions of these small-scale generators, whereas I as an economist have a much more global view on this market. Nevertheless, it is interesting to compare his perspective with mine.

What’s the most useful feature of the Erasmus Energy Forum event?

Participants will have the opportunity to exchange views and gain new insights. The most striking feature is that it enables people to think laterally. We see increasingly decentralised decision-making as an emerging trend in the power sector. In time, this trend could become a real game-changer in the industry, but it is not yet very well understood in terms of its speed and impact. Some observers assume these changes in the energy market's environment will come very fast, whereas others think it will take time for the ‘old world’ to adapt gradually. There is an uncertainty about the way this trend for decentralised decision-making will develop.

Why will participants find your presentation useful?

My presentation has not got a title, yet [February 2014], but it will be based on our recent scientific research in this field. I am positive that interesting research results will be available by the time of the Energy Forum in June. We are currently working in a loose co-operation with an energy supplier and are trying to envisage some ‘black swan’ scenarios. [‘Black Swan’ is a metaphor used for surprising events with major effects that cannot be predicted beforehand and have to be explained after they have happened.] We intend to push our research to the limit to check its plausibility.

Will your presentation contain any exclusives?

It might! It would be a great opportunity to share our results should they be available by the time of the conference. I am planning a workshop-type presentation, describing our work-in-progress. We’re aiming to present consistent scenarios for a high penetration of decentralised generation units in the power sector and are looking for those that are economically plausible for the energy industry. A recent working paper on solar units with batteries; The economic inefficiency of grid parity: the case of German photovoltaics illustrates what we have in mind [EWI Working Paper (2013/19)]. I’ll address questions such as what are the economic drivers for decentralised energy systems? What scenarios can we envisage, and what will the role of policymakers be in such scenarios?

Which of our other speakers or presentations are you most interested in hearing, and why?

The Forum will offer an interesting mix of participants with different backgrounds. What’s great – and innovative – is to bring computer and IT specialists together with strategy analysts, economists, and people from the financial community.

Having speakers from the power sector and IT industry promises to be very interesting because in the past, energy companies were run with a top-down-approach. Many people in the power sector still cannot imagine a market which is being run with a bottom-up approach. There are still those who believe in governmental regulation of the energy market; I don’t share this view. Vice versa, the bottom-up-approach was enabled, and is catalysed, by a liberalised energy market and IT improvements.

Can you give an indication of how your department is preparing for the changes in the energy market?

In the context of this debate, we are employing analytical and simulation models of the energy market that take into account the shifts of the old world to the new world. The power industry is in transition right now, which has an impact on our modelling approaches. So getting in touch with people like Wolf Ketter is necessary to explore new modelling methods.