Balance Responsible Parties (BRPs)

 


 

 

The so-called 'Winter Energy Package' defines a 'Balance Responsible Party' (BRP) as a market participant or its chosen representative responsible for its imbalances in the electricity market (Article 2(2)(m) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)).

 

Another piece of the Winter Energy Package (Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD)) contains, moreover, the definition for the 'Balancing Responsible Party'.

 

It is stipulated in Article 2(49), according to which 'Balancing Responsible Party' means market participants financially responsible for imbalances who have not delegated their responsibility pursuant to Article 4(1) of the aforementioned Proposal for a Regulation.

 

 

Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)

 

Article 2(2)(m)

 

'balance responsible party' means a market participant or its chosen representative responsible for its imbalances in the electricity market

 

Article 4 Balancing responsibility

 

1. All market participants shall aim for system balance and shall be financially responsible for imbalances they cause in the system. They shall either be balance responsible parties or delegate their responsibility to a balance responsible party of their choice.


2. Member States may provide for derogation from balance responsibility in respect of:

 

(a) demonstration projects;

(b) generating installations using renewable energy sources or high-efficiency cogeneration with an installed electricity capacity of less than 500 kW;

 

(c) installations benefitting from support approved by the Commission under Union State aid rules pursuant to Articles 107 to 109 TFEU, and commissioned prior to [OP: entry into force]. Member States may, subject to Union state aid rules, incentivize market participants which are fully or partly exempted from balancing responsibility to accept full balancing responsibility against appropriate compensation.


3. From 1 January 2026, point (b) of paragraph 2 shall apply only to generating installations using renewable energy sources or high-efficiency cogeneration with an installed electricity capacity of less than 250 kW.

 

The role of BRPs in a liberalised European Union electricity market is comprehensively described in the ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 23 December 2013.

  

Given that the market players have an implicit responsibility to balance the electricity system, the BRPs are financially responsible for keeping their own position (sum of their injections, withdrawals and trades) balanced over a given timeframe (the Imbalance Settlement Period).

 

The remaining short and long energy positions in real-time are described as the BRPs' negative and positive imbalances respectively.

 

Depending on the state of the system, an imbalance charge is imposed per Imbalance Settlement Period on the BRPs that are not in balance.

 

This defines the imbalance settlement, which is a core element of balancing markets.

 

It typically aims at recovering the costs of balancing the system and may include incentives for the market to reduce imbalances – e.g. with references to the wholesale market design – while transferring the financial risk of imbalances to BRPs.

  

The terms and conditions related to balancing require that each Balancing Energy bid from a Balancing Service Provider is assigned to one or more Balance Responsible Parties.

  

Moreover, the terms and conditions related to balancing developed by each Transmission System Operator (TSO) for its Responsibility Area or Scheduling Area must contain at least:

 

(a) the requirements for becoming a Balance Responsible Party;

 

(b) the requirement that Balance Responsible Party must be financially responsible for the imbalance to be settled with the Connecting TSO;

 

(c) the data and information required by the Connecting TSO, to calculate imbalance;

 

(d) the settlement procedures; and

 

(e) the criteria to modify the position.

 

 

 

Role of Balance Responsible Parties

 

"In order to be balanced or help the system to be balanced according to the provision defined by the terms and conditions of each TSO, each Balance Responsible Party (BRP) shall be entitled to change its Position in the Intraday timeframe until the Intraday Cross Zonal Gate Closure Time basing on rules and criteria defined by its Connecting TSO. In this case each BRP is obliged to respect specific rules and criteria as defined in terms and conditions of each TSO. Any modification of the Position declared by the BRP shall be submitted to the Connecting TSO if specified in accordance with the terms and conditions by each TSO. TSOs shall not be obliged to accept a change of Position by a BRP after the Intraday Cross Zonal Gate Closure Time.

 

Some market designs rely on BRPs Positions being frozen prior to delivery; others allow for notifying intra-zonal trades after delivery which may help intermittent generation and Demand Side Response to participate in short time (bilateral) markets. TSOs that do not allow for ex-post notification are not obliged to do so and can continue current practice and those TSOs that do allow for ex-post notification are also allowed to continue current practice, even if it is not an obligation.

 

A BRP is financially responsible for the residual imbalances of its perimeter (portfolio) after the process explained above concerning the modification of Position.

 

TSOs are entitled to require BRPs to have a balanced Position after the day ahead process and this requirement would be included in the terms and conditions related to Balancing. This possibility is particular important for TSOs interacting with BRPs that only trade (i.e. have no portfolio of physical injections or withdrawals and hence no Allocated Volume). For those BRP's a balanced Position means that in their commercial trade schedules sales equal purchase. Without this requirement there would be volumes of energy unaccounted for in the system at this stage."

 

Source: ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 23 December 2013

  

 

 

The ENTSO-E proposed that each Balance Responsible Party would have the right to change its position prior to intraday cross zonal gate closure ttime.

 

In addition, pursuant to ENTSO-E, each Balance Responsible Party would have the right to change its position after the Intraday Cross Zonal Gate Closure Time provided it was accepted by its Connecting TSO.

 

The Agency for the Cooperation of Energy Regulators (ACER) in its Recommendation No 03/2015 of 20 July 2015 on the Network Code on Electricity Balancing suggested, however, a modification of the above principles such that Balance Responsible Parties should have the right to change their position before the intraday cross-zonal gate closure time without specific conditions (such conditions may only apply in case of Central Dispatch Model), and were necessary, they can be allowed to change their position after the intraday cross-zonal gate closure time subject to specific national terms and conditions related to balancing.



Documentation

 

 

Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD), Article 2(2)(m), Article 4

 

Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD), Article 2(49)

 

 

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Last Updated on Tuesday, 10 January 2017 22:55
 

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