Abstract
In this paper, seven European Frequency Restoration Reserve (FRR) auctions (positive and negative) are investigated both theoretically and empirically. First, the seven FRR market environments (i.e. supply sides and auction designs) are illustrated. Then, a theoretic analysis of the seven FRR auctions is presented. For this, we identify the underlying cost structures and develop the bidding calculus for each FRR auction. These analyses yield conditions for optimal bidding strategies, i.e. profit maximizing bids. We confront our theoretic findings with empirical auction results in the time span from 2014 to mid 2016. Here, we measure the performance of FRR auctions by the extent of which the submitted bids match theoretic predictions. The central result is that empirical auction data of five FRR auctions do not match theoretical predictions. Finally, we conclude implications for a harmonized European FRR auction design.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
