Growing attention is given to the exchange of balancing services between control areas in different countries. It must be expected that the need for balancing services will increase due to rapid expansion of new renewable energy sources. By having a syste m-wide approach instead of a control area approach, reserve costs can be reduced.
The issue of reserve trading is of particular interest with respect to the exchange between Nordel on the one side and Germany and the Netherlands on the other side because of the characteristics of hydro generation and the planned commissioning of the NorNed cable.
To assess the challenges in these fields, the project exists of the following Work Packages:
WP1 Identification and analysis of existing balancing mechanisms
Documentation and analysis of the balancing mechanisms in the Northern part of Europe and an analysis of the institutional and regulatory differences between the countries.
WP2: Documentation and analysis of present balancing costs
WP3: Alternative mar ket designs
Based upon an analysis of the relation between technical characteristics, the market and the institutional design of existing balancing markets one or more innovative balancing arrangements will be designed.
WP4: Balancing costs in integrate d balancing markets
Estimation of the balancing costs under alternative designs of such markets. Models will be developed for simulating the operation of integrated multinational power systems, with a specific focus on balancing markets. The major share o f the work will be done within two PhD studies.
WP5: Institutional design and harmonization
To realize efficient exchange of balancing services, laws and regulations will need to be harmonized. In this part of the project the focus is on the institutiona l arrangements in the participating countries, harmonization, and barriers. Output of this work package will be policy advice. Two PhD studies are the mainstay of this activity.