Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103285
Authors: 
Just, Sebastian
Weber, Christoph
Year of Publication: 
2012
Series/Report no.: 
EWL Working Paper 04/12
Abstract: 
This paper investigates the incentives market participants have in the German electricity balancing mechanism. Strategic over- and undersupply positions are the result of existing stochastic arbitrage opportunities between the spot market and the balancing mechanism. This strategic behavior can be clearly identified in aggregate market data. These structural imbalances increase the need for reserve capacity, raise system security concerns, and thus burden significant cost on the customers. More effective market designs include changes in the balancing mechanism, the reserve capacity and the intraday spot markets.
Subjects: 
Electricity market design
balancing mechanism
reserve capacity
strategic behavior
JEL: 
L94
Q41
Q47
Document Type: 
Working Paper

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