Who is responsible for balancing the system?

Leonardo Meeus, with Tim Schittekatte and Valerie Reif

Chapter 5 in The Evolution of Electricity Markets in Europe, 2020, pp 84-110 from Edward Elgar Publishing

Abstract: In the fifth chapter of this book, we explore how system balancing is organized in Europe. We answer four questions. First, how to share responsibility between system operators? We introduce the concepts of frequency containment, frequency restoration and reserve replacement. We also refer to a clock incident that illustrates the fragility of the shared responsibility. Second, how to incentivize market parties to be balanced? We explain balance responsible parties and imbalance settlement. Third, how to ensure that reserves are available? We discuss balancing capacity tenders, balancing energy markets and the related issue of scarcity pricing in balancing markets. Fourth, how to integrate balancing markets across borders? We describe the evolution from balancing pilot projects to European platforms. We distinguish between imbalance netting, the exchange of balancing energy, the exchange of balancing capacity, and sharing of reserves. We also discuss open issues in the field of congestion management in balancing markets. The chapter ends with a conclusion, in which we summarize our main points.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2020
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