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A simulation model for imbalance costs of renewable energy aggregators: The case of Greek balancing market

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  • Ioannidis, Filippos
  • Georgitsioti, Tatiani
  • Kosmidou, Kyriaki
  • Zopounidis, Constantinos
  • Andriosopoulos, Kostas

Abstract

The increased penetration of renewable energy sources in Europe has accelerated the participation of aggregators in the wholesale electricity markets. Those participants are responsible for market representation and act as balancing responsible parties for any volume deviation between forecast and actual generation. The Greek Balancing Market is used as a case study, since it is considered as one of the most rapidly growing renewable energy markets across Europe. In this paper, we develop a simulation model able to capture the financial impact of non-compliance charges burdened by aggregators of different size including national terms and conditions. The analysis is also applied to a stressed scenario by assuming marginal deviation above their regulated tolerance limits. Results indicate that for aggregators with market share greater than 5 %, by assuming a double increase in GWh of their annual deviation, would eventually lead to four times higher non-compliance charges. Likewise, an aggregator with capacity of 550 MW would encounter annual non-compliance charges ranging from 1 million € to 2.7 million € for a deviation range of 5 % to 6.5 %. Those findings indicate significant balancing costs burdened by aggregators that jeopardize their long-term viability and eventually the whole market's operation. This is the first paper to empirically capture the complexity of aggregators market in Greece and highlights the necessity to adjust the current electricity market framework by regulators and policymakers.

Suggested Citation

  • Ioannidis, Filippos & Georgitsioti, Tatiani & Kosmidou, Kyriaki & Zopounidis, Constantinos & Andriosopoulos, Kostas, 2025. "A simulation model for imbalance costs of renewable energy aggregators: The case of Greek balancing market," Energy Economics, Elsevier, vol. 142(C).
  • Handle: RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988324008648
    DOI: 10.1016/j.eneco.2024.108155
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    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other

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