Imbalances (Electricity Balancing Market)




'Imbalance' in the EU Internal Electricity Market most commonly means deviations between generation, consumption and commercial transactions of a Balance Responsible Parties (BRP) within a given Imbalance Settlement Period.


The more formal definition for 'Imbalance' (contained in the Electricity Balancing Network Code) is an energy volume calculated for a Balance Responsible Party and representing the difference between the Allocated Volume attributed to that Balance Responsible Party, and the final Position of that Balance Responsible Party and any Imbalance Adjustment applied to that Balance Responsible Party, within a given Imbalance Settlement Period.


The ACERs Framework Guidelines underlines in turn that Imbalances are deviations between generation, consumption and commercial transactions of a BRPs in all timeframes and commercial transactions include sales and purchases on organised markets.



An Imbalance has a size and a direction, indicating the direction of the settlement transaction between Balance Responsible Party and transmission system operator (TSO), with negative indicating Balance Responsible Party's shortage, and positive indicating Balance Responsible Party surplus. 


Pursuant to ACER Opinion No 07/2014 of 21 March 2014 on ENTSO-E Network Code on Electricity Balancing only Imbalances after the closure of the intraday market should be balanced by Transmission System Operators (TSOs) within the Balancing Market timeframe.


More details on the concept of Imbalances under the rules of the European Internal Electricity Market brings the ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 23 December 2013 (see amended version of 6 August 2014).


The said document stresses the aspect that all withdrawals and injections must be covered by a BRP - without any exemptions.


Such an approach mean that also injections from renewable and intermittent resources must be embraced with Imbalance settlement.


Single exception mentioned are withdrawals and injections from Interconnectors, which cannot be covered by BRP.



Even after careful planning producers, suppliers and traders may find themselves out of balance and be exposed to TSOs balancing and settlement regime. In order to optimally mitigate imbalance risk market participants need accurate, clear and timely information about balancing markets. TSOs should provide such information in a comparable format across borders including details about the reserves they have contracted, prices paid and volumes activated for balancing purposes. 


Recital 11 of the Commission Regulation 543/2013 of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 of the European Parliament and of the Council


Imbalance prices are determined at the Imbalance Price Area level.


The ENTSO-E above-mentioned Supporting Document underlines that the Imbalance has a geographical aspect: the area in which an Imbalance is calculated and the area in which an Imbalance Price is calculated.

For most Transmission System Operators (TSOs) its Responsibility Area coincides with 1 Scheduling Area and 1 Bidding Zone; in these cases the Imbalance and Imbalance Price relate to this Bidding Zone.

For a number of TSO's however there are differences between Bidding Zone and/or Responsibility Area and/or Scheduling Area.

In those cases the TSO may have to assign Imbalance Price Areas and Imbalance Area that may not coincide with Bidding Zones.


BRPs will be entitled to challenge its Imbalance calculation.


Any curtailments of commercial transactions on all timescales on organised markets or between BRPs, as performed by a TSO under abnormal operating conditions will also be an adjustment in the Imbalance calculation.


In order to deal with imbalances, TSOs have three types of balancing resources available, which are part of a sequential process based on successive layers of control. These are:


Frequency Containment Reserve (FCR),


Frequency Restoration Reserve (FRR)which can be automatically (aFRR) or manually activated (mFRR), and


Replacement Reserve (RR).


The Balancing Services associated with these resources can be traded in the market in the form of Balancing Capacity or Balancing Energy (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015, p. 205).


More details on the Imbalance Settlement see here... 



Last Updated on Sunday, 01 January 2017 23:09


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