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Energy Journal

Now or Later? Trading Wind Power Closer to Real Time And How Poorly Designed Subsidies Lead to Higher Balancing Costs

Scientific Article in English
Reference
Mauritzen, Johannes (2015). “Now or Later? Trading Wind Power Closer to Real Time And How Poorly Designed Subsidies Lead to Higher Balancing Costs”. Energy Journal 36(4), 149–164. doi.org/10.5547/01956574.36.4.jmau

Author
Johannes Mauritzen

Simulation studies have pointed to the advantages of trading closer to real-time with large amounts of wind power. Using Danish data, I show that, as expected, shortfalls increase the probability of trade on the short-term market, Elbas. But in the period studied between 2010 and 2012 surpluses are shown to decrease the probability of trade. This unexpected result is likely explained by wind power policies that discourage trading on Elbas and lead to unnecessarily high balancing costs. I use a rolling-windows regression to support this claim.