Master Thesis: Modelling balancing prices in the German Electricity Balancing Market

SWM is one of the biggest power supply companies running a virtual power plant and marketing its output on different energy markets, including the day-ahead market. In order to market the virtual power plant efficiently, SWM needs a precise forecast of the output the virtual power plant needs to produce. Any deviation (e.g. due to power plant outage) needs to be accounted for on the German Electricity Balancing Market. Such deviation are causing costs which need to be predicted. The Research questions of this Master Thesis are: What is the main driver behind the balancing market price volatility? How does the pricing on the balancing market relate to the intraday market’s prices? Can the risk behind the output forecasts deviations be quantified?