Investigating the Potential of Balancing Reserve Sharing in Central Europe

Reserve sharing entails two or more Transmission System Operators (TSOs) partially relying on the same balancing reserve capacity, premised on the improbability of simultaneous activation. As it reduces reserve capacity requirements, introducing reserve sharing in Europe could help ensure a cost-efficient electricity balancing process in the future. However, reserve sharing is only possible to a limited extent and its implementation is considered complex. To quantify the cost-saving potential of reserve sharing, a novel method to determine reserve sharing limits is developed. The limits are used to investigate the potential of reserve sharing in an electricity market simulation for a case study of the year 2030. The results show that reserve sharing could lead to substantial cost reductions for balancing reserves. However, the extent to which a control area profits from it depends strongly on its power generation structure and its options to share reserves with neighboring control areas.