An agent-based analysis of main cross-border balancing arrangements for Northern Europe

Abstract

The topic of electricity balancing market integration is first and foremost concerned with the distinction between different cross-border balancing arrangements. Four main arrangements are ACE netting, BSP-TSO trading, an additional voluntary pool, and a common merit order list. In order to investigate the impact of different cross-border balancing arrangements, an agent-based model has been built, which simulates the operation of the balancing markets of the Netherlands, Germany and the Nordic region, including the surplus and balancing energy exchange resulting from integration. The results show that different arrangements have a different impact on imbalance costs for the market. For the case of Northern Europe, the common merit order list results in the lowest imbalance costs, but ACE netting and the voluntary pool are also beneficial integration steps.