The electricity balancing market: Exploring the design challenge

Reinier A.C. van der Veen and Rudi A. Hakvoort

Utilities Policy, 2016, vol. 43, issue PB, 186-194

Abstract: In the unbundled national electricity markets in Europe, the balancing market is the institutional arrangement that deals with the balancing of electricity demand and supply. This paper presents a framework for policy makers that identifies the relevant design variables and performance criteria that play a role in the design and analysis of European balancing markets. We outline the full extent of the design challenge through a discussion of trade-offs among performance criteria, uncertain effects of design variables, and the many inter-linkages between the balancing market and the electricity market at large. Policy makers can address the balancing market design challenge by adopting a structured approach in which design variables, performance criteria, market conditions, system developments, and resultant market incentives are explicitly considered.

Keywords: Electricity market; Balancing market; Market design (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (54)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:43:y:2016:i:pb:p:186-194

DOI: 10.1016/j.jup.2016.10.008

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