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Germany to tailor balancing market for renewables to participate

Highlights

Secondary reserve to move to daily auctions from weekly

Minute (tertiary) reserve auctions also on weekends

Minimum bids below 5 MW to allow for wider participation


Germany's grid regulator BNetzA has changed balancing market regulations including the introduction of daily secondary and tertiary reserve auctions in order to allow renewable power operators to increasingly participate in this segment, it said Wednesday.

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"Renewable energies should increasingly be able to participate in the balancing market based on their growing importance to the system," BNetzA president Jochen Homann said, adding that the new regulations will also make it easier for other providers of flexibility, such as storage and demand-side management (DSM) to participate.

Germany's TSOs are responsible for system stability and regularly hold auctions for three distinctive balancing tasks: primary, secondary and tertiary (minute) reserve.

Secondary balancing auctions will move from weekly to daily auctions from July next year, it said adding that new four-hour slots will also be introduced with wind and solar producers especially depending on the most accurate weather forecasts.



Minute reserve auctions will move from a working-day to a daily frequency, the BNetzA statement said.

Minimum bid sizes may also be reduced below 5 MW allowing smaller providers to participate and qualify for this market segment of system services, which generally generates higher price levels than the intra-day market.

Details of the regulation are published on the grid regulator's website with auctions operated by TSOs on the platform www.regelleistung.net.

According to one of Germany's four TSOs 50Hertz, balancing market capacity has more or less remained the same over the past six years, while an increase in volatility induced by growing intermittent renewable generation sources led to an increase in intraday trading volumes.

"A well-designed, liquid intraday market will be the European future," Sebastian Ziegler, in charge of market and process development for 50Hertz said at the Platts Power Summit in March, adding that such a market would further reduce balancing needs.

Germany's wind and solar portfolio is expected to rise above 100 GW next summer, generally reducing wholesale power prices and making conventional power plants less economical to run with some operators increasingly concentrating on system services for additional revenue.

--Andreas Franke, andreas.franke@spglobal.com
--Edited by Maurice Geller, maurice.geller@spglobal.com