Evaluating the Economic Impact of Tertiary Reserve Exchanges Between Iberian TSO: Essay on European Energy Market Integration

Abstract

This thesis's purpose is to analyze the profitability of the implementation of cross-border tertiary reserve exchange between Iberian Transmission System Operators - BALIT Project - from a Portuguese point of view. For that purpose, the data provided by REN (Rede Elétrica Nacional, meaning, National Electric Grid) was analyzed in order to track periods where reserve exchanges occurred between TSOs and compare the costs and profits obtained with the costs and profits of supplying the same tertiary energy quantity (upward or downward) using only the Portuguese energy suppliers' offers. In addition to the BALIT's profitability, this work expands the study of cross border balancing further by analyzing the hypothetic profit resulting from a broader tertiary reserve exchange system in Europe. This profit was obtained, analyzing the cross border tertiary energy exchange offers submitted by various European TSOs (NGT, RTE, SwissGrid, Terna...) in those same periods (2015 to 2017) and tracking periods where REN would have been able to further profit from Importing or Exporting to other TSOs besides REE.