Abstract
Recent EU legislation enforces the integration of European balancing markets, with harmonized products and international platforms for the procurement and activation of reserves; nonetheless, different power balancing strategies remain. The Netherlands and Belgium encourage market participants to support balancing the control block by publishing real-time information. This article refers to such concepts as smart balancing, and a market simulation tool was developed to assess the relevant market parameters for effective smart balancing. This shall contribute to the true integration of real-time balancing energy markets. The scope of the assessment of relevant market parameters was Germany, and the results showed that a pricing scheme had less impact on the results, as currently is understood by European TSOs and regulators. Moreover, the accuracy and frequency of real-time publication indicate the effectiveness of smart balancing and the associated reduction of the activation of balancing energy and associated costs. Consequently, this article proposed a road map for Germany to introduce an adapted smart balancing approach, starting with a simple traffic light.
Highlights
The activation of manual Frequency Restoration Reserves (mFRR) was reduced in all cases; the aFRR activation, on the other hand, was not significantly reduced in the two traffic light scenarios
The results showed that the traffic light approaches mainly reduced the mFRR demand, while aFRR could only be reduced in scenarios with full transparency
Especially the reduction of manual Frequency Restoration Reserves (FRR) balancing energy was a direct consequence of smart balancing, since large system imbalances sustained for several Imbalance Settlement Period (ISP) were especially suitable for Balance Responsible Parties (BRP) to support the system without taking high risks that the direction of the system imbalance changes and the imbalance price results in costs rather than revenues
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. The tendency that the dispatch of electrical energy moves closer to real time is driven by opportunities for financial optimization of intra-day markets. Power balancing becomes an ever-more interactive task where the imbalance price reflects the real-time value of energy. The European legislation enforces the transition from national balancing markets to harmonized European platforms [1]. This article contributes to the discussion about the enhancement of market freedom for the purposes of designing more efficient balancing energy markets by paying special attention to an improved, marketoriented balancing approach in Germany by providing transparent imbalance pricing
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