Balancing markets and imbalance forecasting: A pathway towards net zero grids

The power industry has experienced increased complexity and significant transformations in recent years due to the increasing penetration of Renewable Energy Sources (RESs). The rising penetration of RESs like solar and wind results in higher generation volatility. Such high-generation volatility necessitates significant efforts in grid balancing. Therefore, the Balancing Market (BM) is introduced in various power systems. The objective of the BM is to minimize the difference between the load and generation in real-time. BM has received wide research attention as it helps to improve system stability and reduce balancing costs. Further, the optimal operation of BM necessitates accurate imbalance volume and price forecasts. This has invited system operators’ and researchers’ attention to imbalance volume and price forecasting. However, a few research reviews are only available on BM, and no review exists on imbalance forecasting. A detailed review can help the system operators and researchers develop efficient BMs and accurate imbalance forecasting models. Therefore, this paper reviews BMs in various countries, BM products, BM operations, and imbalance (volume and price) forecasting. Also, this review analyses the most critical issues and challenges associated with BMs and imbalance forecasting. The review concludes that identified research challenges should be addressed promptly to ensure the optimal operation of the BM and achieve net-zero targets.