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Balancing and Intraday Market Design: Options for Wind Integration

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  • Frieder Borggrefe
  • Karsten Neuhoff

Abstract

EU Member States increase deployment of intermittent renewable energy sources to deliver the 20% renewable target formulated in the European Renewables Directive of 2008. To incorporate these intermittent sources, a power market needs to be flexible enough to accommodate short-term forecasts and quick turn transactions. This flexibility is particularly valuable with respect to wind energy, where wind forecast uncertainty decreases significantly in the final 24 hours before actual generation. Therefore, current designs of intraday and balancing markets need to be altered to make full use of the flexibility of the transmission system and the different generation technologies to effectively respond to increased uncertainty. This paper explores the current power market designs in European countries and North America and assesses these designs against criteria that evaluate whether they are able to adequately handle wind intermittency.

Suggested Citation

  • Frieder Borggrefe & Karsten Neuhoff, 2011. "Balancing and Intraday Market Design: Options for Wind Integration," Discussion Papers of DIW Berlin 1162, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1162
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.387225.de/dp1162.pdf
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    References listed on IDEAS

    as
    1. Glachant, Jean-Michel & Finon, Dominique, 2010. "Large-scale wind power in electricity markets," Energy Policy, Elsevier, vol. 38(10), pages 6384-6386, October.
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    Cited by:

    1. Ciarreta, Aitor & Zarraga, Ainhoa, 2016. "Modeling realized volatility on the Spanish intra-day electricity market," Energy Economics, Elsevier, vol. 58(C), pages 152-163.
    2. Paschmann, Martin, 2017. "Leveraging the Benefits of Integrating and Interacting Electric Vehicles and Distributed Energy Resources," EWI Working Papers 2017-11, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    3. repec:eee:rensus:v:81:y:2018:i:p2:p:2181-2195 is not listed on IDEAS
    4. Arthur Henriot, 2012. "Market design with wind: managing low-predictability in intraday markets," RSCAS Working Papers 2012/63, European University Institute.
    5. Jean Michel Glachant & Arthur Henriot, 2013. "Melting-pots and salad bowls: the current debate on electricity market design for RES integration," Cambridge Working Papers in Economics 1354, Faculty of Economics, University of Cambridge.
    6. repec:eee:renene:v:113:y:2017:i:c:p:855-866 is not listed on IDEAS
    7. repec:eee:energy:v:126:y:2017:i:c:p:112-123 is not listed on IDEAS
    8. Xydas, Erotokritos & Qadrdan, Meysam & Marmaras, Charalampos & Cipcigan, Liana & Jenkins, Nick & Ameli, Hossein, 2017. "Probabilistic wind power forecasting and its application in the scheduling of gas-fired generators," Applied Energy, Elsevier, pages 382-394.
    9. Christian Pape, 2017. "The impact of intraday markets on the market value of flexibility–Decomposing effects on profile and the imbalance costs," EWL Working Papers 1711, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Dec 2017.
    10. Chaves-Ávila, J.P. & Fernandes, C., 2015. "The Spanish intraday market design: A successful solution to balance renewable generation?," Renewable Energy, Elsevier, vol. 74(C), pages 422-432.
    11. repec:eee:rensus:v:81:y:2018:i:p2:p:1953-1965 is not listed on IDEAS
    12. David M. Newbery, 2012. "Contracting for Wind Generation," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    13. Knaut, Andreas & Paschmann, Martin, 2017. "Decoding Restricted Participation in Sequential Electricity Markets," EWI Working Papers 2017-5, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI), revised 31 Aug 2017.
    14. Garnier, Ernesto & Madlener, Reinhard, 2014. "Balancing Forecast Errors in Continuous-Trade Intraday Markets," FCN Working Papers 2/2014, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    15. Hirth, Lion & Ziegenhagen, Inka, 2015. "Balancing power and variable renewables: Three links," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1035-1051.
    16. 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.
    17. Casimir Lorenz & Clemens Gerbaulet, 2014. "New Cross-Border Electricity Balancing Arrangements in Europe," Discussion Papers of DIW Berlin 1400, DIW Berlin, German Institute for Economic Research.
    18. Henriot, Arthur & Glachant, Jean-Michel, 2013. "Melting-pots and salad bowls: The current debate on electricity market design for integration of intermittent RES," Utilities Policy, Elsevier, vol. 27(C), pages 57-64.
    19. repec:eee:rensus:v:75:y:2017:i:c:p:660-667 is not listed on IDEAS
    20. Karsten Neuhoff & Benjamin F. Hobbs & David Newbery, 2011. "Congestion Management in European Power Networks: Criteria to Assess the Available Options," Discussion Papers of DIW Berlin 1161, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    Power market design; integrating renewables; wind energy; balancing; intraday;

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