Developments in the cost of grid balancing services and the design of the European balancing market
Balancing services are traded on the balancing market, which has undergone major shifts in recent years due to external factors like the growing share of renewable energies in electricity production and the progressing electrification of society, especially in the mobility sector. This trend increas...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2023-11-01
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| Series: | Energy Reports |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2352484723011253 |
| _version_ | 1797378703305474048 |
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| author | Benjamin Blat Belmonte Panagiotis Mouratidis Georg Franke Stephan Rinderknecht |
| author_facet | Benjamin Blat Belmonte Panagiotis Mouratidis Georg Franke Stephan Rinderknecht |
| author_sort | Benjamin Blat Belmonte |
| collection | DOAJ |
| description | Balancing services are traded on the balancing market, which has undergone major shifts in recent years due to external factors like the growing share of renewable energies in electricity production and the progressing electrification of society, especially in the mobility sector. This trend increases the demand for balancing services. However, market design is also changing to lower overall expenses for grid stability, which influences price volatility and overall costs for balancing services. Shorter provision times, low capacity limits, and a smaller gap between gate closure time and delivery time enable more flexible market participation of balancing service providers. This article provides an overview of the common European balancing market with a focus on Germany, including recent and upcoming regulatory changes and market design. Recent price trends highlight the importance of market design, especially provision times and price limits. The reduction of the provision time for Frequency Containment Reserve increased offered capacity per bid, and the end of the mixed price procedure in August 2019 led to a less concentrated price range for balancing energy. The introduction of the energy-only market in November 2020 shifted demand from tertiary to secondary control reserve. However, high energy prices in 2021 and 2022 have revealed the limited responsiveness of the balancing energy market. This effect will be reinforced with the exiting of coal-fired and nuclear plants from the pool of balancing service providers in the current decade. Additionally, the future development of the market depends on the integration of energy storage systems such as stationary batteries and electric vehicle batteries, including the regulatory framework. |
| first_indexed | 2024-03-08T20:11:31Z |
| format | Article |
| id | doaj.art-c97f46123c69404cb91c1bbb10593705 |
| institution | Directory Open Access Journal |
| issn | 2352-4847 |
| language | English |
| last_indexed | 2024-03-08T20:11:31Z |
| publishDate | 2023-11-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Energy Reports |
| spelling | doaj.art-c97f46123c69404cb91c1bbb105937052023-12-23T05:21:16ZengElsevierEnergy Reports2352-48472023-11-0110910931Developments in the cost of grid balancing services and the design of the European balancing marketBenjamin Blat Belmonte0Panagiotis Mouratidis1Georg Franke2Stephan Rinderknecht3Corresponding author.; Technical University of Darmstadt, Department of Mechanical Engineering, Institute for Mechatronic Systems, GermanyTechnical University of Darmstadt, Department of Mechanical Engineering, Institute for Mechatronic Systems, GermanyTechnical University of Darmstadt, Department of Mechanical Engineering, Institute for Mechatronic Systems, GermanyTechnical University of Darmstadt, Department of Mechanical Engineering, Institute for Mechatronic Systems, GermanyBalancing services are traded on the balancing market, which has undergone major shifts in recent years due to external factors like the growing share of renewable energies in electricity production and the progressing electrification of society, especially in the mobility sector. This trend increases the demand for balancing services. However, market design is also changing to lower overall expenses for grid stability, which influences price volatility and overall costs for balancing services. Shorter provision times, low capacity limits, and a smaller gap between gate closure time and delivery time enable more flexible market participation of balancing service providers. This article provides an overview of the common European balancing market with a focus on Germany, including recent and upcoming regulatory changes and market design. Recent price trends highlight the importance of market design, especially provision times and price limits. The reduction of the provision time for Frequency Containment Reserve increased offered capacity per bid, and the end of the mixed price procedure in August 2019 led to a less concentrated price range for balancing energy. The introduction of the energy-only market in November 2020 shifted demand from tertiary to secondary control reserve. However, high energy prices in 2021 and 2022 have revealed the limited responsiveness of the balancing energy market. This effect will be reinforced with the exiting of coal-fired and nuclear plants from the pool of balancing service providers in the current decade. Additionally, the future development of the market depends on the integration of energy storage systems such as stationary batteries and electric vehicle batteries, including the regulatory framework.http://www.sciencedirect.com/science/article/pii/S2352484723011253European balancing marketEnergy regulationBidding behaviorFrequency restoration reserve |
| spellingShingle | Benjamin Blat Belmonte Panagiotis Mouratidis Georg Franke Stephan Rinderknecht Developments in the cost of grid balancing services and the design of the European balancing market Energy Reports European balancing market Energy regulation Bidding behavior Frequency restoration reserve |
| title | Developments in the cost of grid balancing services and the design of the European balancing market |
| title_full | Developments in the cost of grid balancing services and the design of the European balancing market |
| title_fullStr | Developments in the cost of grid balancing services and the design of the European balancing market |
| title_full_unstemmed | Developments in the cost of grid balancing services and the design of the European balancing market |
| title_short | Developments in the cost of grid balancing services and the design of the European balancing market |
| title_sort | developments in the cost of grid balancing services and the design of the european balancing market |
| topic | European balancing market Energy regulation Bidding behavior Frequency restoration reserve |
| url | http://www.sciencedirect.com/science/article/pii/S2352484723011253 |
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