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Reforming minute reserve policy in Germany: A step towards efficient markets?

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  • Rammerstorfer, Margarethe
  • Wagner, Christian

Abstract

The present paper provides an empirical assessment of the effects associated with the reorganization of minute reserve markets in Germany. As the aim of the regulator is to assure a competitive market with transparent pricing, we analyze whether the recent policy reform has had an impact on the dynamics of minute reserve prices. Our results show that the level and volatility of positive and negative minute reserve prices decreased substantially. Furthermore, we provide evidence that the degree of integration between reserve and spot markets has increased. Overall, prices reacted to the policy change in a manner that is in line with the regulator's objective. The reform can thus be viewed as a step towards an efficient reserve market.

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  • Rammerstorfer, Margarethe & Wagner, Christian, 2009. "Reforming minute reserve policy in Germany: A step towards efficient markets?," Energy Policy, Elsevier, vol. 37(9), pages 3513-3519, September.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:9:p:3513-3519
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    3. Schillinger, Moritz, 2019. "Balancing Market Design and Opportunity Cost - The Swiss Case," Working papers 2019/14, Faculty of Business and Economics - University of Basel.
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    6. Fabian Ocker & Karl‐Martin Ehrhart & Marion Ott, 2018. "Bidding strategies in Austrian and German balancing power auctions," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 7(6), November.
    7. Sebastian Just & Christoph Weber, 2015. "Strategic behavior in the German balancing energy mechanism: incentives, evidence, costs and solutions," Journal of Regulatory Economics, Springer, vol. 48(2), pages 218-243, October.
    8. Karl-Martin Ehrhart & Fabian Ocker, 2021. "Design and regulation of balancing power auctions: an integrated market model approach," Journal of Regulatory Economics, Springer, vol. 60(1), pages 55-73, August.
    9. Schillinger, Moritz, 2020. "Balancing-market design and opportunity cost: The Swiss case," Utilities Policy, Elsevier, vol. 64(C).
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