Intraday and balancing markets are crucial to ensure the balance of electricity production and consumption at any point of time. Even though both markets are separated, interactions between them affect the behavior of market participants. This thesis investigates the interdependencies of the intraday market and balancing system in Germany. It consists of three papers addressing the questions: How does the growing intraday trading influence the demand of procuring and activating balancing reserves? How does the balancing system affect intraday market behavior? From 2011 to 2017, wind and solar energy production nearly doubled while the procured capacities and activations of balancing reserves declined by 50%. Chapter 2 quantitively explores increased and improved intraday trading as a possible explanation for this development. The introduction of quarter-hourly trading products prevents systematic balancing reserve activations and explains a decrease in balancing reserve procurement and activations by 7 % and 17 %, respectively. Additionally, the results show that active 24/7 trading can reduce the occurrence of high absolute system balances during off-peak hours. Chapter 3 investigates whether intraday trading is affected by imbalance price expectations of the market participants. Even though it is legally prohibited to take intentional imbalances, a quantile regression model shows that the latest published system balance is the most important predictor to estimate intraday price movements close to gate closure. This provides statistical evidence that market participants use this information to financially optimize their portfolio. However, intraday trading close to gate closure still has a positive impact on balancing demand and supply. It reduces both the required balancing energy and high system balances by up to 5 %. Chapter 4 analyzes a strategy of taking positions in the German intraday market based on expected imbalance prices. Using a logistic regression model, it is possible to accurately predict the direction of the system balance in 69 % of the cases and to apply a profitable trading strategy. However, in most cases, the behavior induced by this strategy would not have been system supportive due to biased imbalance price incentives. The latter are a consequence of asymmetric price spreads and insufficiently low imbalance prices compared to intraday prices. An efficient intraday price constraint would partly solve the problem. A proposal provided by the German transmission system operators (TSOs) would have had a positive impact on the strategic behavior and intentional imbalance positions would primarily reduce the system balance. The findings of the three chapters demonstrate the close link of the intraday market and the balancing system in Germany. It is crucial for regulators and TSOs to understand the interactions in order to develop an appropriate market design. If they aim to adapt the regulatory framework, they must analyze not only the impact on the market itself, but also on the behavior of market participants, which in turn may affect other markets as well.weiterlesen