@article{KochHirth, author = {Koch, Christopher and Hirth, Lion}, title = {Short-term electricity trading for system balancing: An empirical analysis of the role of intraday trading in balancing Germany's electricity system}, series = {Renewable \& Sustainable Energy Reviews}, volume = {113}, journal = {Renewable \& Sustainable Energy Reviews}, doi = {10.1016/j.rser.2019.109275}, abstract = {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.}, language = {en} }