Role of Balancing Markets in Dealing with Future Challenges of System Adequacy Caused by Energy Transmission

Abstract

The national energy and climate plans developed by the Baltic States for the period up to 2030 foresee a significant increase in the share of renewable energy in final consumption. Therefore, the development of wind, solar and distributed generation in the Baltic electricity system is expected to increase significantly in the next decade and, thus, the need for balancing capacity will increase. The planned synchronisation of the Baltic power system with the power system of Continental Europe in 2025 will also increase the need for frequency restoration and balancing reserves. At the same time, the shutdown of uncompetitive thermal power plants in the Baltics reduces centralized generation capacity. If this trend continues, the risk of electricity supply shortages will increase in the future. Therefore, it is important to identify activities that help mitigate this risk and take timely actions.