Balancing Market Integration in the Northern European Continent: A 2030 Case Study

Abstract

Increased production flexibility will be needed for the operation of a future power system with more uncertainty due to an increased share of uncontrollable generation from renewable sources. Wind energy is expected to cover a large portion of the future renewable generation. In this paper, a comparison is carried out between two balancing market models, simulating a non- and fully-integrated northern European market in a future 2030 scenario. Wind power is modelled based on high resolution numerical weather prediction models and wind speed measurement for actual and forecasted wind power production. The day-ahead dispatch and balancing energy markets are settled separately. First, the day-ahead market is modelled with simultaneous reserve procurement for northern continental Europe. Available transmission capacity is taken into account in the reserve procurement phase. In a second step, the balancing energy market is modelled as a real-time power dispatch on the basis of the day-ahead market clearing results. The results show the benefit of balancing market integration for the handling of variable production. Cost savings are obtained from balancing market integration due to less activation of reserves resulting from imbalance netting and increased availability of cheaper balancing resources when integrating larger geographical areas.