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Cost reduction potentials in the German market for balancing power

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  • Flinkerbusch, Kai
  • Heuterkes, Michael

Abstract

This article examines potential cost reductions in the market for balancing power by pooling all four German control areas. In a united control area both the procurement and the production of balancing power may be more efficient than in four separated control areas. Our data contain bids on energy procurement as well as balancing power flows in the period from December 2007 to November 2008. A reference scenario simulates the market results for secondary and tertiary balancing power. Subsequently, we simulate a united control area. We show that in the period under review the total costs of balancing power are reduced by 17%.

Suggested Citation

  • Flinkerbusch, Kai & Heuterkes, Michael, 2010. "Cost reduction potentials in the German market for balancing power," Energy Policy, Elsevier, vol. 38(8), pages 4712-4718, August.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:8:p:4712-4718
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    References listed on IDEAS

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    1. Chao, Hung-Po & Wilson, Robert, 2002. "Multi-dimensional Procurement Auctions for Power Reserves: Robust Incentive-Compatible Scoring and Settlement Rules," Journal of Regulatory Economics, Springer, vol. 22(2), pages 161-183, September.
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    1. repec:dui:wpaper:1502 is not listed on IDEAS
    2. Kai Flinkerbusch, "undated". "A more efficient procurement mechanism for reserve capacity in the German market for balancing power," Working Papers 201178, Institute of Spatial and Housing Economics, Munster Universitary.
    3. Gianfreda, Angelica & Parisio, Lucia & Pelagatti, Matteo, 2018. "A review of balancing costs in Italy before and after RES introduction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 549-563.
    4. Flinkerbusch, Kai, 2011. "A more efficient procurement mechanism for reserver capacity in the German market for balancing power," CAWM Discussion Papers 52, University of Münster, Münster Center for Economic Policy (MEP).
    5. Simon Hagemann & Christoph Weber, 2013. "An Empirical Analysis of Liquidity and its Determinants in The German Intraday Market for Electricity," EWL Working Papers 1317, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Oct 2013.
    6. Thimmel, Markus & Fridgen, Gilbert & Keller, Robert & Roevekamp, Patrick, 2019. "Compensating balancing demand by spatial load migration – The case of geographically distributed data centers," Energy Policy, Elsevier, vol. 132(C), pages 1130-1142.
    7. Fridgen, Gilbert & Keller, Robert & Thimmel, Markus & Wederhake, Lars, 2017. "Shifting load through space–The economics of spatial demand side management using distributed data centers," Energy Policy, Elsevier, vol. 109(C), pages 400-413.
    8. Hanemann, Philipp & Bruckner, Thomas, 2016. "Retrieval Probabilities of Secondary Control Reserve within Systems with a High Share of Renewable Energies," Contributions of the Institute for Infrastructure and Resources Management 01/2016, University of Leipzig, Institute for Infrastructure and Resources Management.
    9. Pape, Christian & Hagemann, Simon & Weber, Christoph, 2016. "Are fundamentals enough? Explaining price variations in the German day-ahead and intraday power market," Energy Economics, Elsevier, vol. 54(C), pages 376-387.
    10. Hahn, Henning & Krautkremer, Bernd & Hartmann, Kilian & Wachendorf, Michael, 2014. "Review of concepts for a demand-driven biogas supply for flexible power generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 383-393.
    11. Budny, Christoph & Madlener, Reinhard & Hilgers, Christoph, 2013. "Economic Feasibility of Pipeline and Underground Reservoir Storage Options for Power-to-Gas Load Balancing," FCN Working Papers 18/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    12. Oprea, Simona-Vasilica & Bâra, Adela & Ciurea, Cristian-Eugen, 2022. "A novel cost-revenue allocation computation for the competitiveness of balancing responsible parties, including RES. Insights from the electricity market," Renewable Energy, Elsevier, vol. 199(C), pages 881-894.

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