The inc-dec game and how to mitigate it

The power exchange doesn't account for all system details, like temporary grid constraints or voltage control services. This can cause mismatches in electricity flows, requiring real-time adjustments and resulting in price differences. Predictable price gaps allow companies to profit through arbitrage, such as selling more electricity than produced and repurchasing it at a lower real-time price. This has caused significant issues in countries like Italy and the UK, increasing consumer costs and complicating grid management. As grid bottlenecks and system service gaps grow, arbitrage risks may rise, further increasing the pressure on the power system.