  In electricity markets with a dual-pricing scheme for balancing energy,
controllable production units typically participate in the balancing market as
"active" actors by offering regulating energy to the system, while renewable
stochastic units are treated as "passive" participants that create imbalances
and are subject to less competitive prices. Against this background, we propose
an innovative market framework whereby the participant in the balancing market
is allowed to act as an active agent (i.e., a provider of regulating energy) in
some trading intervals and as a passive agent (i.e., a user of regulating
energy) in some others. To illustrate and evaluate the proposed market
framework, we consider the case of a virtual power plant (VPP) that trades in a
two-settlement electricity market composed of a day-ahead and a dual-price
balancing market. We formulate the optimal market offering problem of the VPP
as a three-stage stochastic program, where uncertainty is in the day-ahead
electricity prices, balancing prices and the power output from the renewable
units. Computational experiments show that the VPP expected revenues can
increase substantially compared to an active-only or passive-only
participation, and in the paper we discuss how the variability of the
stochastic sources affects the balancing market participation choice.
