Balancing reserves within a decabonized European electricity System in 2050 — From market developments to model insights

This paper expands the discussion about future balancing reserve provision to the long-term perspective of 2050. Most pathways for a transformation towards a decarbonized electricity sector rely on very high shares of fluctuating renewables. This can be a challenge for the provision of balancing reserves, although their influence on the balancing cost is unclear. Apart from the transformation of the generation portfolio, various technical and regulatory developments within the balancing framework might further influence balancing costs. This paper transforms these developments into quantitative scenario definitions and applies them to dynELMOD (dynamic Electricity Model), an investment model of the European electricity system that is extended to include balancing reserve provision. The results show that balancing reserve cost can be kept at current levels for a renewable electricity system until 2050, when using a dynamic reserve sizing horizon. Apart from the sizing horizon, storage capacity withholding duration and additional balancing demand from RES are the main driver of balancing costs.