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.