  An increase in energy production from renewable energy sources is viewed as a
crucial achievement in most industrialized countries.
  The higher variability of power production via renewables leads to a rise in
ancillary service costs over the power system, in particular costs within the
electricity balancing markets, mainly due to an increased number of extreme
price spikes. This study focuses on forecasting the behavior of price and
volumes of the Italian balancing market in the presence of an increased share
of renewable energy sources. Starting from configurations of load and power
production, which guarantee a stable performance, we implement fluctuations in
the load and in renewables; in particular we artificially increase the
contribution of renewables as compared to conventional power sources to cover
the total load. We then forecast the amount of provided energy in the balancing
market and its fluctuations, which are induced by production and consumption.
Within an approach of agent based modeling we estimate the resulting energy
prices and costs. While their average values turn out to be only slightly
affected by an increased contribution from renewables, the probability for
extreme price events is shown to increase along with undesired peaks in the
costs.
