During the last weeks, the system imbalance has partly been corrected upwards by several GW, reaching levels of over 7 GW. The economic consequences have already been discussed in some media articles for example here Handelsblatt.
What do these extreme situations mean for our price estimations?
As an example, we have recalculated 3 days under extreme conditions with the most recent raw data. It seems obvious that the regulation volume and the system imbalance was not in line. The high imbalance volumes were not only balanced using regular reserve units but the TSOs must have had other sources like OTC deals or international TSO activities outside the IGCC cooperation. In addition, the data seems to be somewhat contradictory. In some cases, we were seeing downward regulations even when the grid was several GW short.
For the calculation of the imbalance price, only the reserve and the IGCC volume should be of relevance. The prices for those reserve types were quite moderate in the described situations. Other regulation activities like TSO OTC deals should not be part of the imbalance price calculation. Following the official calculation formula, this leads to surprisingly low imbalance price estimations for the example days. Below you find 3 example days of how our Wattsight analysis would have looked like with the recently published data.
Imbalance market analysis for Thu, June 6, 2019
Imbalance market analysis for Wed, June 12, 2019
Imbalance market analysis for Tue, June 25, 2019
In the following weeks, we will probably see a lot of discussions about how to deal with the mentioned TSO balancing activities and how they should be taken into account in the final imbalance price.
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