Integration of regulating power markets of different balancing regions has a potential to reduce the costs of balancing within multinational power markets by exchange of regulating power between these regions. Currently, most regulating power markets are operating on a national level so that exchange of regulating power between regions is minimal. This paper investigates the potentials for reduction of total balancing costs by creation of multinational regulating power markets studying the case study of Northern Europe; the Netherlands, the Nordic region and Germany. An optimization model is built to analyze the effects on total balancing costs -the costs paid by a multinational TSO to the providers of regulating power. Based on the numerical results, total balancing costs can decrease by 100 million Euros per year when enough interconnection capacity is allocated to balancing trade. Furthermore, total amount of activated regulating power is reduced due to supportive power exchange. Finally, the use of the uniform pricing mechanism leads to frequent congestion of interconnection lines due to balancing trade. On average, regulation power prices stay within the same range.Index Terms-Frequency control, international trade, optimization methods, power system security.
Abstract-The integration of balancing markets, i.e. marketbased balance management arrangements, is regarded as an important next step in the development towards an Internal Electricity Market for Europe, and is expected to largely reduce the costs of real-time balancing by enhancing competition in balancing service markets. However, there is still a large knowledge gap on the possibilities and effects of balancing market integration. This paper contributes to filling up that gap by means of a qualitative assessment of the main alternative market arrangements for cross-border balancing. We evaluate the impact of seven main cross-border balancing arrangements on the basis of a set of ten high-level performance criteria. The analysis shows that although the net impact of the arrangements of ACE netting and a common merit order list can be expected to be positive, there are major uncertainties in impact related to the dependency on detailed balancing market design choices and power system and market conditions. The uncertainties and dependencies regarding the impact of balancing market integration call for a detailed analysis in each individual integration case.
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