Introduction to Market4RES Questionnaire

This questionnaire has been drafted in the context of the European Project ‘Market4RES’, which is aimed at providing recommendations on the developments to take place in short and long term electricity markets driving a successful and efficient integration of large amounts of RES generation in the long term.

Within this project, Work Package 3 focuses on the conceptual assessment of design options for the developments to take place in short and long term markets. Options here selected as most promising should be further investigated in WP5 of our project with the help of quantitative models to determine which deserve being proposed for their implementation.
A Workshop on the first findings of the analysis conducted within WP3 of the project took place in Brussels on the 24th of June. There, the project team presented their preliminary conclusions on preferred, or most promising, design options, together with those that should be disqualified as contenders because they had some serious drawbacks. Arguments for the selection of best, and worst, design options were provided.

This questionnaire represents a logical continuation of our Workshop and is aimed at collecting useful feedback from relevant stakeholders like you on a set of issues related to the design of markets that we believe are specially critical and controversial, or disputable. Topics to discuss have been arranged into a reduced number of blocks related to main aspects of the functioning of markets both in the long and the short term.

We count on your participation to provide us with very valuable information to take into account in our final analysis and conclusions. If you feel like answering only a specific part of the questionnaire because this is more the most related to your field expertise, do not hesitate to do so. We also encourage you to disseminate this within your institutions looking for complementary expertise.

Many thanks on behalf of WP3 team within the Market4RES project.

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    Part VIII: BALANCING MARKETS

    Main core elements required to achieve well-functioning, competitive and efficient balancing markets

    * Framework to foster competition among BSPs: related to procurement designs that favor market liquidity and long-term efficiency * Adequate incentives on BRPs to balance themselves close to real time or to support the system balance: related to efficient and cost-reflective procurement arrangements and imbalance settlement design options

    Main procurement design options

    * Combined versus separated procurement of balancing capacity and balancing energy: in the latter, BSPs without a contract for capacity provision can bid into the energy “market” (possibility of gate-closures for energy bids much closer from real time). * Combined versus separated procurement of upward and downward balancing capacity: single product (upward and downward capacity bids are linked) versus two separated products. * Marginal versus pay-as-bid pricing of balancing products

    Main imbalance settlement design options

    * Imbalance pricing - Single: the same price is applied to all BRPs - Dual price: different prices are applied to BRPs aggravating and reducing the system imbalance - Hybrid pricing: mainly single pricing; dual pricing based on activated balancing energy prices is applied when both upward and downward balancing energy are activated within the settlement period (Dutch Model) * Short versus long settlement period: 15 minutes versus one hour.

    A) Separate markets for balancing capacity and balancing energy

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    B) Imbalance pricing

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