View metadata, citation and similar papers at core.ac.uk                                                                                                                                brought to you by    CORE
                                                                                                                                                                               provided by Research Papers in Economics
                                                                                                                          62
                     Discussion 
                     Papers
                      Deutsches Institut für Wirtschaftsforschung                                                                                                                                   2011
                      Balancing and Intraday Market 
                      Design: 
                      Options for Wind Integration
                      Frieder Borggrefe and Karsten Neuhoff
         
         
         
        Opinions expressed in this paper are those of the author(s) and do not necessarily reflect views of the institute. 
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
        IMPRESSUM 
         
        © DIW Berlin, 2011 
         
        DIW Berlin 
        German Institute for Economic Research 
        Mohrenstr. 58 
        10117 Berlin 
         
        Tel. +49 (30) 897 89-0 
        Fax +49 (30) 897 89-200 
                 
        http://www.diw.de
         
        ISSN print edition 1433-0210 
        ISSN electronic edition 1619-4535 
         
        Papers can be downloaded free of charge from the DIW Berlin website: 
                         
        http://www.diw.de/discussionpapers
         
        Discussion Papers of DIW Berlin are indexed in RePEc and SSRN: 
        http://ideas.repec.org/s/diw/diwwpp.html 
                                      
        http://www.ssrn.com/link/DIW-Berlin-German-Inst-Econ-Res.html
              
              Balancing and Intraday Market Design: Options for Wind Integration 
                                                     
                                                     
                                 Frieder Borggrefe+ & Karsten Neuhoff* 
                                                     
                                                     
                                                         • 
                                              October 2011
                                                     
              
              
             Abstract 
             EU Member States increase deployment of intermittent renewable energy sources to deliver 
             the 20% renewable target formulated in the European Renewables Directive of 2008. To 
             incorporate these intermittent sources, a power market needs to be flexible enough to 
             accommodate short-term forecasts and quick turn transactions. This flexibility is particularly 
             valuable with respect to wind energy, where wind forecast uncertainty decreases significantly 
             in the final 24 hours before actual generation. Therefore, current designs of intraday and 
             balancing markets need to be altered to make full use of the flexibility of the transmission 
             system and the different generation technologies to effectively respond to increased 
             uncertainty. This paper explores the current power market designs in European countries and 
             North America and assesses these designs against criteria that evaluate whether they are able 
             to adequately handle wind intermittency. 
              
              
             Keywords: Power market design, integrating renewables, wind energy, balancing, intraday 
              
              
              
              
             _________________________ 
             +     University of Cologne, Germany 
             *     Climate Policy Initiative (CPI) / DIW Berlin - e-mail (karsten.neuhoff@cpiberlin.org). 
             •     We thank Julian Barquin, Christian Nabe, and Benjamin F. Hobbs for all their valuable 
             comments and input. This paper has been produced in support of the “EU Intelligent Energy 
             Europe program” RE-shaping project which also funded part of the research along with Climate 
             Policy Initiative.