Integration of European Electricity Balancing Markets

Abstract

Achieving a fully integrated energy market under the EU electricity target model constitutes an ongoing process. Given that the integration of spot markets is already at a mature stage, the next step forward is the successful integration of the balancing markets across European control areas. An analytical review of all the aspects governing the European balancing market integration is presented in this paper, providing a detailed description on the European regulatory framework on this topic. In addition, the design variables that need to be harmonized among national balancing markets as well as the available balancing market arrangements for the exchange of cross-border balancing services are presented. Numerical examples of the essence of the balancing market integration are provided, and the implementation projects initiated by European transmission system operators (TSOs) towards this direction are described. The review concludes that balancing market integration may indeed lead to a significant reduction in the balancing costs for the participating control areas, but further effort is still required to move from a regional level to a European-wide real-time balancing market, so that the whole potential of such a new landscape is revealed to the benefit of end-consumers.