White Papers

Electricity Marketplaces for IPPs, and the Multi-Market Strategy

Introduction 

The Dutch electricity sector is an ecosystem comprised of various marketplaces that facilitate trading. Electricity and flexibility are traded across several interconnected markets that operate at different timeframes and for different purposes, from long-term hedging to congestion management, and each market carries its own access and regulatory requirements set by the national Transmission System Operator (TSO) and EU bodies such as ACER. These markets operate at different timeframes and with different purposes. Each market also has distinct access and regulatory requirements, typically set by the Transmission System Operator, or EU-wide regulators (being TenneT and ACER in the Netherlands, respectively). The different marketplaces are shown below.

The  most important of these regulatory roles are Balance Responsible Party (BRP), Balancing Service Provider (BSP), and Congestion Service Provider (CSP). The BRP status is required whenever physical delivery or a trade resulting in a nomination to the grid operator occurs, including in long-term, short-term, congestion, balancing, or settlement markets. However, for purely financial instruments such as futures a BRP is not required. A participant must be a BSP if they want to trade in balancing markets. CSP status is needed for participation in congestion markets.

Across the markets, electricity prices are falling, with PPA prices dropping and negative day-ahead prices  becoming increasingly common in Europe and the Netherlands. New records for negative price hours reported in recent months: this trend is being driven by growing solar and wind output, limited short-term storage capacity, and limited demand flexibiliy , leading to price cannibalisation. Without an integrated multi-market strategy, for example active intraday optimisation, participation in redispatch/GOPACS, balancing offers or use of Ex-Post markets, IPPs face declining capture rates, higher revenue volatility and greater cash-flow risk.

Spot Markets (D-1 and D)  

Spot markets are short-term trading venues where electricity is bought and sold close to the time of physical delivery. Prices are set by the intersection of supply and demand and therefore provide transparent, high-frequency price signals that allow market participants to optimise positions as delivery approaches. These markets play a central role in balancing system supply and demand on a rolling, near-real-time basis.

Historically, the day-ahead (DA) market was the primary forward-looking spot marke t. In DA participants submit bids and offers for hourly, and more recently, quarter-hourly delivery periods for the following day. The auction typically clears once (commonly at noon the day before delivery) and establishes schedules that market participants and TSOs  use as a baseline for the delivery day.

After the DA market closes at noon, one day before delivery, the ID market allows participants to adjust their positions on the day itself. The intraday market lets participants adjust those schedules the day before delivery, and on the delivery day itself . The ID market has two forms: continuous trading, where orders are matched and executed in real time throughout the trading period, and intraday auctions, where orders are aggregated and executed at specific auction times, similar to the DA auction. ID continuous trading in many European countries is coupled via XBID (Cross-Border ID), which enables market participants to access a shared order book across countries, allowing cross-border trades and improved liquidity.

Intraday is becoming increasingly common for IPPs, due to  several concrete benefits that the market offers. It allows them to update offers as new production or weather forecasts become available, improving capture of price spikes and reducing imbalance exposure. Crucially, intraday trading also offers a practical way to mitigate the impact of negative DA prices: rather than being stuck with a negative day-ahead position, an IPP can rebalance volumes in the intraday market, limiting or preventing negative net revenues across the combined DA and intraday positions. The ability to trade continuously up to gate-closure is particularly valuable for variable renewables, where forecast uncertainty between the DA auction and real time is high.   Where permitted, IPPs can also use passive balancing: intentionally deviating from the BRP programme to settle at the imbalance price when it’s expected to outperform intraday, for example by overdelivering in short systems or underdelivering in long systems.

Both DA and ID markets are accessed via energy exchanges (for example Etpa). Transmission System Operators require that parties trading in DA or ID are Balance Responsible Parties (BRPs). Proper coordination is therefore essential to avoid imbalance exposure.

Congestion Management Mechanisms (D-1 and D)

In the same timeframe as the spot markets, congestion markets such as Capacity-Limiting Contracts (CBC) and redispatch markets play important roles in maintaining system stability.

CBC refers to the compensation of reserve capacity procured by the TSO to ensure there’s enough flexibility in the system. There are multiple variations of CBCs, the first one being a fixed time-window, where the participant agrees to change their generation/consumption during specific periods. The other is the on-call limitation, where participants remain available to change load or generation whenever requested. CBCs help TSOs avoid more costly grid reinforcements by ensuring demand or generation can be curtailed when needed. Participants are compensated either for availability (being flexible when called upon) or for actual activation (when flexibility is utilised), depending on contract terms.

Redispatch involves the reallocation of generation and consumption schedules to alleviate grid congestion. Assets are told to ramp up or down and are compensated for this.  For instance, a battery operator in a congested area may be instructed to charge (consume more), or a solar producer may be asked to curtail (produce less), both actions relieve stress on the local grid. In the Netherlands, redispatch can take place through GOPACS, a market-based platform that enables congestion management by collecting and activating bids from market participants willing to adjust their production or consumption in congested areas. GOPACS sources bids through platforms like Etpa, ensuring that redispatch is market-based and cost-efficient. To facilitate cost-effective congestion management, GOPACS matches bids between participants inside the congested area and those outside it, using a bid pairing mechanism. For example, a participant in the congested zone submits a sell order (for example for downward flexibility), which is matched with a buy order from a participant outside the congestion zone. This matching ensures that redispatch is carried out efficiently and transparently, without distorting market prices.

For IPPs, GOPACS offers several concrete benefits as part of a multi-market strategy. First, it creates an additional revenue stream: flexible assets (notably batteries and dispatchable plants) can bid for both availability and activation payments. Second, for variable generators exposed to curtailment risk (for example solar or wind in congested nodes), GOPACS provides a route to monetise flexibility rather than simply lose production: either by offering downward flexibility or by pairing with buyers outside the constrained zone. Third, participation in redispatch can be coordinated with DA/ID and balancing activity: an IPP can plan day-ahead schedules, adjust intraday positions, and offer residual flexibility into GOPACS, capturing incremental revenue when activated.

Access to the redispatch market requires registration as, or representation by, a Congestion Service Provider (CSP). A CSP is a role required by the TSO for congestion management. Participants must also coordinate nominations with a BRP, which can be themselves, or a third party.

Balancing Markets (Gate Closure to Time of Delivery)

The balancing markets are used by TSOs to ensure that electricity supply and demand are matched in real time. When differences occur between generation and consumption, TSOs procure balancing services to correct these imbalances. There are three main markets: Frequency Containment Reserve (FCR), automatic Frequency Restoration Reserve (aFRR), and manual Frequency Restoration Reserve (mFRR). 

FCR is the fastest form of balancing (deployment within 30 seconds), responding automatically and activated based on local frequency deviations. FCR is procured in a joint European market through a daily auction. Participants must be able to deliver symmetrical or asymmetrical responses to deviations and are paid for availability.

aFRR is slightly slower (within 5 minutes) and is activated by the TSO via automatic setpoints from Load Frequency Control systems. aFRR is designed to restore system frequency and relieve FCR. Bids are submitted in a merit-order list, typically in 15-minute blocks, with a separate price for capacity and energy. aFRR providers must meet technical prequalifications and are subject to performance monitoring and real-time telemetry requirements.

mFRR is manually activated balancing power with longer and more serious deviations, triggered by a TSO dispatch signal. Providers must be able to respond within 15 minutes. Like aFRR, mFRR is procured through a bidding system, and the activated volumes determine a marginal activation price per quarter-hour. These prices are published ex post and influence the imbalance settlement price.

For IPPS balancing markets are an important element of a multi-market strategy. They offer a way to diversify revenue beyond day-ahead and intraday trading, and to monetise flexibility (especially for batteries, flexible gas units or demand assets). Co-located storage can be particularly valuable: a battery can be optimised across the day-ahead/intraday stack and simultaneously offer fast reserves (FCR/aFRR), capturing capacity payments while still exploiting price spreads. Participation in balancing markets can also improve bankability of projects because steady ancillary revenues are often viewed favourably by lenders.

That said, participation comes with trade-offs. Prequalification, telemetry and certification require upfront investment and ongoing operational discipline. There are performance penalties for non-delivery, and some reserve obligations constrain energy available for merchant trading. Practically speaking, IPPs should model the expected ancillary revenues against certification and operational costs, decide whether to become a BSP or use an aggregator, and ensure PPA contracts allow for reserve participation where relevant.

To participate in balancing markets, parties must be registered as a Balancing Service Provider (BSP). A BSP is an entity certified to provide balancing services and is a requirement set by the TSO. Technical prequalification and performance obligations apply. Participants must also be linked to a BRP, either by being one or contracting with one.
FCR is accessed through the European FCR Cooperation Platform, while aFRR and mFRR are procured via the national TSO's systems.

Settlement Market (after Time of Delivery)

After delivery, deviations between scheduled and actual positions are addressed through imbalance settlement. The TSO calculates imbalances for each BRP based on the difference between metered and nominated volumes per 15 minute window. BRPs are financially settled against the imbalance price, which reflects the cost of restoring system balance using activated balancing energy. These prices are directional, and BRPs can be billed for both upward and downward imbalances.

In the Netherlands, TenneT defines four regulation states: “−1” when downward reserves are activated due to a system surplus, “+1” when upward reserves are deployed due to a system deficit, “2” when both upward and downward reserves are activated within 15 minutes, and “0” when no balancing reserve is required. In a normal regulation state (-1 and +1), parties can either earn money or have to pay for their imbalance position. However, during regulation state 2, imbalance is always costly.  During  regulation state 2, imbalances can be financially settled in a unique market.  This market, the Ex-Post market, is facilitated by Etpa and operates after real-time delivery, allowing BRPs and other parties to reallocate volumes and optimise imbalance positions retroactively. This is especially useful for BRPs mitigating imbalance costs after delivery and reconciliations of intraday deviations in asset performance, with over €60 million in savings in 2024 . More information on the Ex-Post market can be found in our Whitepaper. Trades in the Ex-post market are still considered energy trades, but they serve a retrospective purpose and are fully integrated with nomination systems for proper BRP settlement. For market access, TenneT requires the same setup as for spot market trading: parties must either be BRPs themselves or operate under a BRP umbrella.

For IPPs, the Ex-Post market is more than bookkeeping: it is a strategic tool to reduce costs and unlock additional revenue. By combining accurate intraday optimisation with access to Ex-Post trading, an IPP can actively manage and materially lower imbalance charges rather than simply absorbing them.

We Help You Navigate Access and Roles

Navigating access to electricity markets requires not only understanding the different marketplaces, but also the right registrations and partnerships, especially the role of the Balance Responsible Party (BRP). Whether you're a trader, industrial, flexibility provider, or energy service company, Etpa can support your journey.

We help new entrants and innovators access markets quickly and compliantly. Through our expansive network, we can connect you to trusted BRP partners or support your registration directly. Whether you're looking to trade on the intraday market, participate in GOPACS, or make use of the Ex-Post market, we are here to assist.

Get in touch with us to explore the options and get connected.
Together, we can help you unlock the full value of participation in the Dutch electricity market.