Exploring the Effectiveness of the Integrated European Balancing Markets in Encouraging Demand Response Engagement

The energy transition is reducing the available flexibility of the power system. Consequently, there is a pressing need to identify new flexibility sources and adapt market designs to ensure a reliable and stable operation of the power system. Among the potential solutions, Demand Response (DR) has shown great potential to offer flexibility through ancillary markets. This paper presents a comprehensive analysis of the market design of the Integrated European Balancing Markets, focusing on the FCR, MARI and PICASSO platforms. We evaluate their effectiveness in fostering DR engagement, identifying both strengths and weaknesses. While characteristics such as capacity and granularity hinder DR participation across all platforms, linking and grouping in MARI can increase DR involvement. We propose enhancements, including the addition of linking and grouping characteristics to PICASSO and the approval of conditional linking to complex bids to further incentivize DR participation.