No Cover Image

Journal article 106 views

Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom

Huanhuan Chen, Jinke Li Orcid Logo, Nigel O'Leary Orcid Logo, Jing Shao Orcid Logo

Journal of Environmental Management, Volume: 371, Start page: 123239

Swansea University Authors: Jinke Li Orcid Logo, Nigel O'Leary Orcid Logo, Jing Shao Orcid Logo

Full text not available from this repository: check for access using links below.

Check full text

DOI (Published version): 10.1016/j.jenvman.2024.123239

Abstract

The increasing integration of renewable energy sources in the UK electricity sector has posed challenges to the stability of the system, leading to a sharp rise in the costs of balancing services. This study analyses half-hourly data from January 2017 to December 2023 to examine the factors determin...

Full description

Published in: Journal of Environmental Management
ISSN: 0301-4797
Published: Elsevier BV 2024
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa68151
first_indexed 2024-11-02T22:55:01Z
last_indexed 2024-11-25T14:21:31Z
id cronfa68151
recordtype SURis
fullrecord <?xml version="1.0"?><rfc1807><datestamp>2024-11-07T10:08:12.1398090</datestamp><bib-version>v2</bib-version><id>68151</id><entry>2024-11-02</entry><title>Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom</title><swanseaauthors><author><sid>1d12dcf12aad73117a2a5f43cf233aae</sid><ORCID>0000-0001-6325-804X</ORCID><firstname>Jinke</firstname><surname>Li</surname><name>Jinke Li</name><active>true</active><ethesisStudent>false</ethesisStudent></author><author><sid>fb1a5569008b44e42a4c63a3f971bd29</sid><ORCID>0000-0002-5971-9306</ORCID><firstname>Nigel</firstname><surname>O'Leary</surname><name>Nigel O'Leary</name><active>true</active><ethesisStudent>false</ethesisStudent></author><author><sid>4957a0af8a9dd429738c64c124c3f8e8</sid><ORCID>0000-0003-0587-317X</ORCID><firstname>Jing</firstname><surname>Shao</surname><name>Jing Shao</name><active>true</active><ethesisStudent>false</ethesisStudent></author></swanseaauthors><date>2024-11-02</date><deptcode>SOSS</deptcode><abstract>The increasing integration of renewable energy sources in the UK electricity sector has posed challenges to the stability of the system, leading to a sharp rise in the costs of balancing services. This study analyses half-hourly data from January 2017 to December 2023 to examine the factors determining the imbalance price in the UK's balancing mechanism, with particular focus on the sharp price increases in 2021&#x2013;2022. Employing a Generalised Additive Model (GAM) to account for non-linear relationships, the analysis finds that the imbalance price is positively affected by the net imbalance volume (demand-side factor) and negatively impacted by the de-rated margin (supply-side factor). The wholesale electricity price, however, is identified as the dominant factor driving both the mean and volatility of the imbalance price during 2021&#x2013;2022. These findings suggest that the balancing mechanism is functioning effectively and that a reduction in the wholesale price would lead to a lower imbalance price and thus lower costs of balancing services.</abstract><type>Journal Article</type><journal>Journal of Environmental Management</journal><volume>371</volume><journalNumber/><paginationStart>123239</paginationStart><paginationEnd/><publisher>Elsevier BV</publisher><placeOfPublication/><isbnPrint/><isbnElectronic/><issnPrint>0301-4797</issnPrint><issnElectronic/><keywords>Balancing mechanism; Imbalance price; Net imbalance volume; De-rated margin; Wholesale electricity price</keywords><publishedDay>1</publishedDay><publishedMonth>12</publishedMonth><publishedYear>2024</publishedYear><publishedDate>2024-12-01</publishedDate><doi>10.1016/j.jenvman.2024.123239</doi><url/><notes/><college>COLLEGE NANME</college><department>Social Sciences School</department><CollegeCode>COLLEGE CODE</CollegeCode><DepartmentCode>SOSS</DepartmentCode><institution>Swansea University</institution><apcterm>SU Library paid the OA fee (TA Institutional Deal)</apcterm><funders>Swansea University</funders><projectreference/><lastEdited>2024-11-07T10:08:12.1398090</lastEdited><Created>2024-11-02T22:52:15.3286165</Created><path><level id="1">Faculty of Humanities and Social Sciences</level><level id="2">School of Social Sciences - Economics</level></path><authors><author><firstname>Huanhuan</firstname><surname>Chen</surname><order>1</order></author><author><firstname>Jinke</firstname><surname>Li</surname><orcid>0000-0001-6325-804X</orcid><order>2</order></author><author><firstname>Nigel</firstname><surname>O'Leary</surname><orcid>0000-0002-5971-9306</orcid><order>3</order></author><author><firstname>Jing</firstname><surname>Shao</surname><orcid>0000-0003-0587-317X</orcid><order>4</order></author></authors><documents><document><filename>68151__32868__e70909d7886946a08ac1e7d49a11cdd6.pdf</filename><originalFilename>68151.VoR.pdf</originalFilename><uploaded>2024-11-07T10:06:23.7490872</uploaded><type>Output</type><contentLength>4687026</contentLength><contentType>application/pdf</contentType><version>Version of Record</version><cronfaStatus>true</cronfaStatus><documentNotes>&#xA9; 2024 The Authors. This is an open access article under the CC BY license.</documentNotes><copyrightCorrect>true</copyrightCorrect><language>eng</language><licence>http://creativecommons.org/licenses/by/4.0/</licence></document></documents><OutputDurs/></rfc1807>
spelling 2024-11-07T10:08:12.1398090 v2 68151 2024-11-02 Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom 1d12dcf12aad73117a2a5f43cf233aae 0000-0001-6325-804X Jinke Li Jinke Li true false fb1a5569008b44e42a4c63a3f971bd29 0000-0002-5971-9306 Nigel O'Leary Nigel O'Leary true false 4957a0af8a9dd429738c64c124c3f8e8 0000-0003-0587-317X Jing Shao Jing Shao true false 2024-11-02 SOSS The increasing integration of renewable energy sources in the UK electricity sector has posed challenges to the stability of the system, leading to a sharp rise in the costs of balancing services. This study analyses half-hourly data from January 2017 to December 2023 to examine the factors determining the imbalance price in the UK's balancing mechanism, with particular focus on the sharp price increases in 2021–2022. Employing a Generalised Additive Model (GAM) to account for non-linear relationships, the analysis finds that the imbalance price is positively affected by the net imbalance volume (demand-side factor) and negatively impacted by the de-rated margin (supply-side factor). The wholesale electricity price, however, is identified as the dominant factor driving both the mean and volatility of the imbalance price during 2021–2022. These findings suggest that the balancing mechanism is functioning effectively and that a reduction in the wholesale price would lead to a lower imbalance price and thus lower costs of balancing services. Journal Article Journal of Environmental Management 371 123239 Elsevier BV 0301-4797 Balancing mechanism; Imbalance price; Net imbalance volume; De-rated margin; Wholesale electricity price 1 12 2024 2024-12-01 10.1016/j.jenvman.2024.123239 COLLEGE NANME Social Sciences School COLLEGE CODE SOSS Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2024-11-07T10:08:12.1398090 2024-11-02T22:52:15.3286165 Faculty of Humanities and Social Sciences School of Social Sciences - Economics Huanhuan Chen 1 Jinke Li 0000-0001-6325-804X 2 Nigel O'Leary 0000-0002-5971-9306 3 Jing Shao 0000-0003-0587-317X 4 68151__32868__e70909d7886946a08ac1e7d49a11cdd6.pdf 68151.VoR.pdf 2024-11-07T10:06:23.7490872 Output 4687026 application/pdf Version of Record true © 2024 The Authors. This is an open access article under the CC BY license. true eng http://creativecommons.org/licenses/by/4.0/
title Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
spellingShingle Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
Jinke Li
Nigel O'Leary
Jing Shao
title_short Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
title_full Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
title_fullStr Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
title_full_unstemmed Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
title_sort Examining the drivers of the imbalance price: Insights from the balancing mechanism in the United Kingdom
author_id_str_mv 1d12dcf12aad73117a2a5f43cf233aae
fb1a5569008b44e42a4c63a3f971bd29
4957a0af8a9dd429738c64c124c3f8e8
author_id_fullname_str_mv 1d12dcf12aad73117a2a5f43cf233aae_***_Jinke Li
fb1a5569008b44e42a4c63a3f971bd29_***_Nigel O'Leary
4957a0af8a9dd429738c64c124c3f8e8_***_Jing Shao
author Jinke Li
Nigel O'Leary
Jing Shao
author2 Huanhuan Chen
Jinke Li
Nigel O'Leary
Jing Shao
format Journal article
container_title Journal of Environmental Management
container_volume 371
container_start_page 123239
publishDate 2024
institution Swansea University
issn 0301-4797
doi_str_mv 10.1016/j.jenvman.2024.123239
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Social Sciences - Economics{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Social Sciences - Economics
document_store_str 0
active_str 0
description The increasing integration of renewable energy sources in the UK electricity sector has posed challenges to the stability of the system, leading to a sharp rise in the costs of balancing services. This study analyses half-hourly data from January 2017 to December 2023 to examine the factors determining the imbalance price in the UK's balancing mechanism, with particular focus on the sharp price increases in 2021–2022. Employing a Generalised Additive Model (GAM) to account for non-linear relationships, the analysis finds that the imbalance price is positively affected by the net imbalance volume (demand-side factor) and negatively impacted by the de-rated margin (supply-side factor). The wholesale electricity price, however, is identified as the dominant factor driving both the mean and volatility of the imbalance price during 2021–2022. These findings suggest that the balancing mechanism is functioning effectively and that a reduction in the wholesale price would lead to a lower imbalance price and thus lower costs of balancing services.
published_date 2024-12-01T14:44:28Z
_version_ 1822141834329063424
score 11.048626

Similar Items