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Dealing with renewables integration: a comparative study of Belgian and French balancing systems

Mathieu Richard () and Boris Solier
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Mathieu Richard: TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: The rise of renewable energy in power systems poses new real-time flexibility challenges for Transmission System Operators, impacting reserve energy demand. In this regard, substantial theoretical literature has extensively supported the harmonization of European balancing systems toward a unified reactive philosophy. So far, however, few studies have compared balancing systems based on quantitative assessments. This study aims to bridge this gap by measuring the effect of renewables on reserve energy demand in opposing contexts of balancing philosophy: the Belgian and French systems. While the former is already based on a reactive philosophy in line with the unified target model, the latter relies on a proactive philosophy but is ready to undergo fundamental changes to comply with EU directives. Using a seasonal autoregressive and moving average model with exogenous variables (SARIMAX) and 2021 reserve energy and power mix data, we estimate the effect of renewables generation on reserve energy needs. Our results show a persistent asymmetrical effect of renewables across balancing market design: an increase in downward reserve energy demand and a decrease in upward reserve energy demand. From a policy perspective, the persistent asymmetrical pattern across different systems highlights a potential lack of liquidity in the short-term markets, advocating for the deployment of new flexible levies to serve additional downward flexibility needs. However, the lower magnitude of the asymmetrical effect in Belgium suggests that reactive philosophy is a more suitable balancing design to accommodate renewable integration.

Date: 2024-09-12
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Published in YEEES 34 – Durham University 34th Young Energy Economists and Engineers Seminar, Sep 2024, Durham (GB), United Kingdom

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Working Paper: Dealing with renewables integration: a comparative study of Belgian and French balancing systems (2024)
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