Proactive planning and activation of manual reserves in sequentially cleared balancing markets

As a part of the integration of European balancing markets, new products and platforms will improve the possibilities for Transmission System Operators (TSOs) for exchange of balancing energy and netting of imbalances between areas. Proactive TSOs using early activation of manual reserves will have the opportunity to use combination of different products to cover their expected imbalance. These products will be cleared sequentially on separate market platforms, and at different lead times. This paper describes the situation faced by a TSO when determining its need for balancing energy from different reserve products. It also proposes an opportunity-cost based valuation strategy to optimize the volumes obtained in the different markets, thereby minimizing balancing costs.