Passive Balancing Through Intraday Trading: Whether Interactions Between Short-Term Trading and Balancing Stabilize Germany’s Electricity System

Koch, Christopher; Maskos, Philipp

doi:10.32479/ijeep.8750

Cited by 6 publications

(4 citation statements)

References 35 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is not permissible to take an intentional imbalance position [24]. Empirical studies, however, show that at least some market players respond to imbalance pricing expectations [26]. For this action to stabilize the system, it needs a price that is adequate for the imbalance.…”

Section: Imbalance Settlementmentioning

confidence: 99%

Techno-Economic Analysis of Redox-Flow and Lithium-Iron-Phosphate Battery Storages at Different Imbalance Settlement Intervals

Ezennaya,

Yuan,

Kowal

2023

Sustainability

View full text Add to dashboard Cite

The proliferation of renewable energy sources has presented challenges for Balancing Responsible Parties (BRPs) in accurately forecasting production and consumption. This issue is being addressed through the emergence of the balancing markets, which aims to maintain real-time equilibrium between production and consumption across various imbalance settlement intervals. This study conducted a techno-economic analysis of Lithium-Iron-Phosphate (LFP) and Redox-Flow Batteries (RFB) utilized in grid balancing management, with a focus on a 100 MW threshold deviation in 1 min, 5 min, and 15 min settlement intervals. Imbalance data, encompassing both imbalance volumes and prices, sourced from the Belgian Transmission System Operator (TSO)—Elia—over a three-year period from September 2019 to September 2022, formed the basis of this investigation. The analysis underscored the significant influence of factors, such as imbalance volume, price dynamics, and market settlement intervals on the technical and financial feasibility of Battery Energy Storage Systems (BESSs) within the context of balancing management. Notably, the technical and economic results of LFP and RFB exhibited comparable tendencies across the different market settlement intervals, providing valuable insights into potential developments about how trends will evolve in other settlement intervals.

show abstract

Section: Imbalance Settlementmentioning

confidence: 99%

Techno-Economic Analysis of Redox-Flow and Lithium-Iron-Phosphate Battery Storages at Different Imbalance Settlement Intervals

Ezennaya,

Yuan,

Kowal

2023

Sustainability

View full text Add to dashboard Cite

show abstract

“…Again, this financial benefit is not as large as it would have been if they had settled imbalances in advance through spot market exchanges. Koch and Maskos (Koch and Maskos 2020) give first empirical evidence that German market participants appear to react on the latest published system (im-)balances, since much of the trading shortly before market closure is caused by market participants trying to avoid these imputed costs.…”

Section: Evaluation Settingmentioning

confidence: 99%

Make or buy: IT-based decision support for grid imbalance settlement in smarter electricity networks

Wederhake

Schlephorst²,

Zyprian³

2022

Energy Inform

View full text Add to dashboard Cite

Decision (support) systems are a particularly important type of information system to energy informatics. A key challenge in energy informatics is that electricity supply must be in balance with demand at all times. More volatile renewable energy sources increase the relevance of electricity network balancing, i.e., imbalance settlement. Typically, electricity distribution network operators bought balancing power from external service providers (Buy option). Interestingly, however, more local energy resources help smarter electricity networks develop a Make option, as in our real-world evaluation. Choosing the better decision alternative within the relevant timeframes challenges human decision-making capabilities. Therefore, this research proposes a model-based decision system to improve the operators’ decisions concerning Make or Buy under various levels of data quality represented by availability, granularity, and timeliness. The study reports savings up to 40% of costs for imbalance settlement supporting ambitious development efforts by the municipality we study in our real-world evaluation.

show abstract

“…Thus, it is not allowed to take intentional imbalance positions. However, empirical analyses indicate that at least some market participants react to imbalance price expectations [46]. It needs an appropriate imbalance price so that this activity stabilizes the system.…”

Section: Price Incentives For Intraday Imbalance Optimizationmentioning

confidence: 99%

Intraday imbalance optimization: incentives and impact of strategic intraday bidding behavior

Koch

2021

Energy Syst

Self Cite

View full text Add to dashboard Cite

Intraday markets are crucial to balance supply and demand in the very short-term, up to delivery. They are often designed as continuous auctions with a pay-as-bid pricing mechanism. While several studies assess trading strategies to balance different types of portfolios, they normally do not consider the incentives of the imbalance prices for portfolio management. This paper analyzes a strategy of taking positions in the German intraday market based on expected imbalance prices and examines its impact on system stability. Using a logistic regression model, it is possible to accurately predict the direction of the overall system balance and to apply a profitable trading strategy. For a period from 01/07/2017 to 30/06/2019, the strategy outperforms a simple approach by EUR 47 000 per MW. However, this behavior would predominantly not have been system supportive due to biased imbalance price incentives. These are asymmetric price spreads and insufficiently low imbalance prices compared to intraday prices. An efficient intraday price constraint would partly solve the problem. The overall share of system supportive imbalance positions would raise by ten percentage points. In situations with high system wide imbalances, up to three-quarters of the positions would stabilize the system. These findings are important for regulation in Germany and other countries with a single imbalance pricing as they provide an indication for crucial points of the imbalance pricing rules to incite appropriate market behavior.

show abstract

Passive Balancing Through Intraday Trading: Whether Interactions Between Short-Term Trading and Balancing Stabilize Germany’s Electricity System

Cited by 6 publications

References 35 publications

Techno-Economic Analysis of Redox-Flow and Lithium-Iron-Phosphate Battery Storages at Different Imbalance Settlement Intervals

Techno-Economic Analysis of Redox-Flow and Lithium-Iron-Phosphate Battery Storages at Different Imbalance Settlement Intervals

Make or buy: IT-based decision support for grid imbalance settlement in smarter electricity networks

Intraday imbalance optimization: incentives and impact of strategic intraday bidding behavior

Contact Info

Product

Resources

About