TY - JOUR A1 - Koch, Christopher A1 - Hirth, Lion T1 - Short-term electricity trading for system balancing: An empirical analysis of the role of intraday trading in balancing Germany's electricity system T2 - Renewable & Sustainable Energy Reviews N2 - Previous studies have noted that, surprisingly, Germany’s dramatic expansion of wind and solar energy coincided with a reduction of short-term balancing reserves. This paper provides further and updated evidence, supporting this “German Balancing Paradox”: since 2011 wind and solar energy nearly doubled while reserve requirements and reserve activation declined by around 50%. We quantitatively explore one reason for reduced balancing needs: increased and improved short-term wholesale electricity trading. Electricity trading is now commonly done around the clock and based on quarter hours, rather than hours. The shift to quarter-hourly products alone explains a decrease in balancing energy by 17%. We also find strong evidence for market parties to respond efficiently to imbalance charges, suggesting that market-based approaches to balancing work. Y1 - 2019 UR - https://opus4.kobv.de/opus4-hsog/frontdoor/index/index/docId/3092 N1 - Also available at SSRN: https://ssrn.com/abstract=3284262 or http://dx.doi.org/10.2139/ssrn.3284262 VL - 113 ER -