Market Response for Real-Time Energy Balancing – Evidence From Three Countries

This paper highlights and evaluates different approaches how market response is incentivized by local balancing market design to support real-time balancing of electrical energy within an ongoing imbalance settlement period, also known as “passive balancing”. Data from the control blocks of the Netherlands, Belgium and Germany are analyzed and the behavior of market parties is evaluated. Even though the three countries pursue similar power balancing strategies for the activation of balancing reserves and cost allocation, the incentives for market parties to support transmission system operators in balancing the control block differs. The highest degree of supported market response is found in the Dutch system with real-time publication of imbalance prices, followed by the Belgian system publishing only activated reserves. The German balancing market design does not explicitly incentivize market response for energy balancing in real-time.