There are growing concerns in Germany that the current energy-only market will not be able to deliver security of supply. Concerns revolve around two key questions:

1.  Will the market be able to deliver sufficient capacity to meet demand in the future, given the closure of nuclear plants and some thermal plants, and the increasing penetration of variable renewable generation?

2.  Will the market be able to deliver the flexible types of capacity that will be required to meet the changing dynamics of generation on the system, particularly for managing the variable output of renewable generation?

While market designers are pursuing forms of a capacity mechanism to address the first question, there does not appear to be such a clear cut answer to the second question. We know that some commentators have called for improvements to the energy-only market1 , and for focus on the flexibility requirements of the system now and in the future. We also know that in Brussels, the Transmission System Operators (TSOs) are about to publish their finished draft of the Network Code on Electricity Balancing – a European Target Model blueprint to harmonise all Member States’ energy only markets’ trading arrangements. This code focuses on the balancing arrangements, which are broadly the arrangements for procuring and paying for the flexible forms of energy used to maintain energy balance on transmission systems. However, there are few commentators in the German market who have pulled all of these requirements together to understand what changes may be required to market arrangements to deliver flexibility in the future.

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Melle-Kruisdijk - Contact

  Melle Kruisdijk
   Vice President Europe
   Wärtsilä Energy Solutions
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