Bidding into balancing markets in a hydro-dominated electricity system

Arbeitspapier

In an electricity system, demand and supply have to be balanced in real time. Since most energy is traded before real time already in forward, day-ahead and intraday markets imbalances can occur. To ensure the balance between demand and supply even if power plants deviate from their schedules, the system operator procures balancing capacity and energy in balancing markets. The market outcomes may significantly differ from one country to the other depending on the underlying generation technologies and market design. In this paper, we have a look at the balancing market prices of a hydro-dominated electricity system using Switzerland as a case study. By using a short-term hydropower operation model and a set of Swiss hydropower plants, we are able to identify a competitive benchmark for Swiss balancing market prices defined by the opportunity costs of hydropower for providing balancing capacity. Our results show that Swiss balancing market prices are influenced by several drivers but do not hint at any market imperfections.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WWZ Working Paper ; No. 2019/13

Classification and Topics

• Classification: Wirtschaft
• Subject: hydropower ; cross-market optimization ; balancing ; Switzerland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schillinger, Moritz ; Weigt, Hannes
• Event: Veröffentlichung
• (who): University of Basel, Center of Business and Economics (WWZ)
• (where): Basel
• (when): 2019

Further information

• DOI: doi:10.5451/unibas-ep71783
• Handle: http://hdl.handle.net/10419/207103
• Last update: 10.03.2025, 11:45 AM CET