اصلاح سیاست دقیقه ای در آلمان: یک قدم به سوی بازارهای کارآمد؟

The present paper provides an empirical assessment of the effects associated with the reorganization of minute reserve markets in Germany. As the aim of the regulator is to assure a competitive market with transparent pricing, we analyze whether the recent policy reform has had an impact on the dynamics of minute reserve prices. Our results show that the level and volatility of positive and negative minute reserve prices decreased substantially. Furthermore, we provide evidence that the degree of integration between reserve and spot markets has increased. Overall, prices reacted to the policy change in a manner that is in line with the regulator's objective. The reform can thus be viewed as a step towards an efficient reserve market.

The balance between energy supply and demand – and consequently a balanced grid load – at each point in time is a major task of the system operator. Her duty is to estimate beforehand the amount of possible deviations in order to secure sufficient reserve capacities and to avoid imbalances. The effectiveness of balancing management, however, does not only depend on reliable forecasts of energy injections and withdrawals from the grid, but also necessitates an adequately designed market for balancing power. Since the German market serves as the most important transit market of the continent and has to satisfy the largest demand for energy consumption in Europe, a high level of grid security is indispensable. The German power grid is divided in four power control areas. Before 2001, the transmission system operators and their associated power plants were the only suppliers of tertiary control and ensured the system balance through bilateral contracts between themselves. In 2001, the national Federal Cartel Office prescribed the implementation of separate procurement auctions for each of the four different power control areas, which became effective in 2002. However, in 2006 the German monopoly commission still detected several deficiencies of the market mechanism in their monitoring report (see MC, 2006). In particular, the commission emphasized that the market design failed to ensure market efficiency and that it was not able to prevent collusive behaviour or restrict discriminatory power of the balancing group leaders. As a consequence, the commission arrogated the design of a new legal framework in order to assure competitive and transparent pricing. A corresponding consensual concept was agreed upon on the 29th of August, 2006. Consequently, since the 1st of December, 2006 the transmission network operators participate in a joint tendering procedure for tertiary reserves supported by a web-based platform. With the aim of providing an adequate regulatory environment for an efficient market through stimulating competition and increasing transparency, the new regulatory framework defines an auction design based on merit orders, reduces the minimum bid quantity, limits the extent of self-selling, and sets out disclosure requirements. The present paper provides an empirical assessment of how the market dynamics of minute reserve prices have changed after the policy reform. In particular, we analyze whether the implementation of the new tendering procedure has had an impact on market prices and their volatility and whether the degree of integration between reserve and spot markets has increased. Previewing our results, we find that the level and volatility of minute reserve prices decreased substantially and that the prices are stronger (co)-integrated with the spot market than before the policy change. This allows for conclusions whether the new market design succeeds in supporting the regulator's objective to assure an efficient market. The remainder of the paper is organized as follows. Section 2 provides a brief review of the related literature and Section 3 describes the organization of the German minute reserve market. We present our empirical analysis in 4 and 5 concludes.

The present paper provides an empirical assessment of the effects associated with the reorganization of minute reserve markets in Germany. As the aim of the regulator was to assure a competitive market with transparent pricing, we analyze whether the policy reform has had an impact on the dynamics of minute reserve prices. Our results show that the level and volatility of positive and negative minute reserve prices decreased substantially, being indicative for a higher level of competition. Furthermore, we provide evidence that the degree of integration between reserve and spot markets has increased. The equilibrium relationship between the two markets is characterized by minute reserve prices being lower than spot prices, which is consistent with the specification of the respective instruments. A further property of the joint dynamics is that deviations from the equilibrium relationship are offset by corresponding changes in reserve prices, i.e. reserve prices adjust to spot prices rather than the other way round. This is consistent with the fact that the spot market is the larger market in terms of openness to market participants and with respect to trading volume. Overall, our results suggest that reserve prices reacted to the policy change in a manner that is in line with the regulator's objective. The reform can thus be viewed as a step towards an efficient reserve market.