Leen Vandezande

Assessment of the implementation of cross-border balancing trade between Belgium and the Netherlands

Balancing services in Belgium and the Netherlands are procured and activated locally so far. However, the implementation of cross-border balancing trade between both countries is expected to entail significant benefits. The assessment in this paper illustrates that the implementation of a cross-border balancing market between Belgium and the Netherlands is a lucrative and achievable goal that does not entail unrealistic or overly expensive preconditions. Significant cost reductions could have occurred with cross-border balancing during the year 2008-due to netting and cross-border procurement of relatively cheaper services. Restrictions imposed on cross-border balancing due to cross-border capacity constraints would have been rather small.

Implementation of cross-border balancing in Europe

Following initiatives on the day-ahead and intra-day stage, a cross-border approach towards real-time balancing constitutes a logical next step in the process towards an Internal Electricity Market (IEM) in Europe. Determining the real-time price for energy on which market parties need to be able to rely for last resort supply, well designed cross-border balancing markets are a key element in an efficiently functioning IEM. For the moment, balancing market designs significantly differ between countries and a coordinated approach for cross-border exchange of balancing services is lacking. This paper identifies possible distortions following an insufficient harmonization of national designs and derives both minimal prerequisites and long term recommendations for the implementation of cross-border balancing in Europe.