Abstract
Thanks to new technological advancements and EU policy impulse, distributed energy resources (DER) are poised to become a viable alternative to conventional electricity generation for the provision of balancing services to transmission system operators. In this paper we show that the design variables that affect DER access to and participation in the organized balancing market include different features of auction configuration as well as a number of formal, administrative and technical aspects of market design. In a comparative case study of the balancing markets in Austria, Germany and the Netherlands, we determine the extent to which a given market design effectively facilitates DER participation. To structure this analysis, we designed an assessment framework that provides a comprehensive tool for the assessment of balancing markets in Europe vis-à-vis DER participation. Our results show that flexible pooling conditions, a higher bidding frequency and product resolution, and the authorization of non-precontracted bids, among others, can significantly ease DER integration in the market. Different design variables, however, can enhance or neutralize each other's effects, so their interrelations need to be taken into account in order to achieve an improved and harmonized balancing market design.
Highlights
The increasing availability and decreasing costs of distributed energy resources (DER) raise the question of how these resources can effectively contribute to achieving such policy goals as consumer empowerment and market efficiency
In this paper we show that the design variables that affect DER access to and participation in the organized balancing market include different features of auction configuration as well as a number of formal, administrative and technical aspects of market design
DER are small-scale electricity generation units, including variable renewable energy resources, wind turbines and photovoltaics, and other distributed generation as well as storage and demand response connected to the distribution network
Summary
The increasing availability and decreasing costs of distributed energy resources (DER) raise the question of how these resources can effectively contribute to achieving such policy goals as consumer empowerment and market efficiency. These feed into an assessment framework, which structures the evaluation for a specific balancing market to deepen the understanding of the requirements placed on balancing resources as well as its alignment with the EU policy objectives and regulatory framework..
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