Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and Germany

Policy debates regarding the balancing system are similar in both countries, focussing on strengthening imbalance price signals and the extent that VRE generators bear the integration costs they cause. Both countries can learn from each other's balancing market and imbalance settlement designs. Britain should reform its balancing markets to be more transparent, competitive and open to new providers (especially VRE generators). Shorter trading intervals and gate closure would both require and enable market participants (including VRE) to take more responsibility for balancing. Germany should consider a reserve energy market and move to marginal imbalance pricing.