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Short-term electricity trading for system balancing: An empirical analysis of the role of intraday trading in balancing Germany's electricity system

  • 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.

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Metadaten
Document Type:Article
Language:English
Author(s):Christopher Koch, Lion HirthORCiD
Parent Title (English):Renewable & Sustainable Energy Reviews
Publication year:2019
Publishing Institution:Hertie School
DOI:https://doi.org/10.1016/j.rser.2019.109275
Release Date:2019/11/01
Volume:113
Notes:
Also available at SSRN: https://ssrn.com/abstract=3284262 or http://dx.doi.org/10.2139/ssrn.3284262
Licence of document (German):Metadaten / metadata
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