The Past, Current and Future Development of Balancing Power Markets

This talk discusses the economic interdependencies between the electricity wholesale market and the balancing power market. An integrated market model as well as a game-theoretical analysis is presented. It is shown that there exists an overall market equilibrium, which ensures an efficient outcome under certain conditions. By analyzing the market data from Germany we find that the costs decreased over the years, but they are still above the theoretical equilibrium. The talk also relates to the current developments in the German markets, which had a large media coverage in June and July this year. Furthermore, an evaluation of the future pan-European auction design is presented.