Balancing and redispatch: the next stepping stones in European electricity market integration: Improving the market design and the efficiency of the procurement of balancing and redispatch services

Balancing and redispatch are essential services for the security and stability of the electricity network. Balancing refers to continuously maintaining a balance between supply and demand through activating flexible resources. Redispatch refers to changing the dispatch of generators to remedy network congestion. The need for flexibility resources for balancing and congestion management is ever more pressing due to several policy, market and technological aspects.
In a time of the fast-paced, massive transformation that is the energy transition, the electricity system and network are becoming more vulnerable to disturbances, requiring more flexibility. In this dissertation, we test the hypothesis that the efficiency of procurement can be improved with the help of market design adjustments. Thus, the author explores the following main question:
How can market design changes help transmission system operators procure balancing and redispatch services in a more economically efficient manner?
The answer to the main research question is subdivided into two parts: the first one studying a well-defined and well-established balancing market and the second one, building upon the analysis produced in the former, addresses issues related to redispatch. For this, market modelling was combined with analytical and empirical approaches to study the procurement of the two services.
Market harmonization and network integration are developing rapidly in the EU, creating new challenges for the electricity system. This dissertation addresses key issues that system operators, regulators, policymakers and market participants face in the electricity markets today and provides practical recommendations as to how market design can be improved and what other measures are required to ensure economic efficiency. The developed tools provide new means of decision support for energy system stakeholders.
This study does not only contribute to improving network security through market design but, by helping reduce system costs, contributes to the overall economic welfare and the achievement of EU policy goals. Finally, it provides the scientific community with the insights and methodological know-how, in particular in the field of agent-based modelling and machine learning, for the study of numerous future questions in the area of electricity market design, bidder incentives and market integration.