'Imbalance' in the EU Internal Electricity Market most commonly means deviations between generation, consumption and commercial transactions of a balance responsible parties (BRPs) within a given imbalance settlement period.
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Recital 15 of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity |
All market participants should be financially responsible for imbalances they cause in the system, representing the difference between the allocated volume and the final position in the market.
More formal definition of an 'imbalance' is an energy volume calculated for a BRP and representing the difference between the allocated volume attributed to that BRP, and the final position of that BRP and any imbalance adjustment applied to that BRP, within a given imbalance settlement period (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, Article 2(8)).
Imbalances are settled by Transmission System Operators (TSOs).
ACER Opinion No 07/2014 of 21 March 2014 on ENTSO-E Network Code on Electricity Balancing underlines only imbalances after the closure of the intraday market should be balanced by TSOs within the balancing market timeframe.
All withdrawals and injections must be covered by a BRP, without any exemptions (ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014).
Consequently, 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.
Commission Regulation 543/2013 of 14 June 2013 on submission and publication of data in electricity markets
Recital 11
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.
Article 54(6) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing stipulates that an imbalance shall indicate the size and the direction of the settlement transaction between the balance responsible party and the TSO; an imbalance can have alternatively:
(a) a negative sign, indicating a balance responsible party's shortage;
(b) a positive sign, indicating a balance responsible party's surplus.
According to Article 54(5) of the Commission Regulation (EU) 2017/2195 allocated volume shall not be calculated for a balance responsible party which does not cover injections or withdrawals - i.e. for pure traders trading in virtual points.
Imbalance prices are determined at the imbalance price area level.
The above-mentioned ENTSO-E Supporting Document underlines that the imbalance has a dual geographical aspect: the area in which an imbalance is calculated and the area in which an imbalance price is calculated.
For most TSOs their responsibility area coincides with:
- one scheduling area and
- one 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.
Article 54(2) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing stipulates that the imbalance area shall be equal to the scheduling area, except in case of a central dispatching model where imbalance area may constitute a part of scheduling area.
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
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).
TSOs are required to publish, as close to real time as possible but with a delay after delivery of no more than 30 minutes, the current system balance of their scheduling areas, the estimated imbalance prices and the estimated balancing energy prices (Article 6(13) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity).
Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing
Article 54
Imbalance calculation
1. Each TSO shall calculate within its scheduling area or scheduling areas when appropriate the final position, the allocated volume, the imbalance adjustment and the imbalance:
(a) for each balance responsible party;
(b) for each imbalance settlement period;
(c) in each imbalance area.
2. The imbalance area shall be equal to the scheduling area, except in case of a central dispatching model where imbalance area may constitute a part of scheduling area.
3. Until the implementation of the proposal pursuant to Article 52(2), each TSO shall calculate the final position of a balance responsible party using one of the following approaches:
(a) balance responsible party has one single final position equal to the sum of its external commercial trade schedules and internal commercial trade schedules;
(b) balance responsible party has two final positions: the first is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from generation, and the second is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from consumption;
(c) in a central dispatching model, a balance responsible party can have several final positions per imbalance area equal to generation schedules of power generating facilities or consumption schedules of demand facilities.
4. Each TSO shall set up the rules for:
(a) the calculation of the final position;
(b) the determination of the allocated volume;
(c) the determination of the imbalance adjustment pursuant to Article 49;
(d) the calculation of the imbalance;
(e) claiming the recalculation of the imbalance by a balance responsible party.
5. Allocated volume shall not be calculated for a balance responsible party which does not cover injections or withdrawals.
6. An imbalance shall indicate the size and the direction of the settlement transaction between the balance responsible party and the TSO; an imbalance can have alternatively:
(a) a negative sign, indicating a balance responsible party's shortage;
(b) a positive sign, indicating a balance responsible party's surplus.
Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity
Article 6(13)
Transmission system operators or their delegated operators shall publish, as close to real time as possible but with a delay after delivery of no more than 30 minutes, the current system balance of their scheduling areas, the estimated imbalance prices and the estimated balancing energy prices.
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Documentation |
Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity, Article 6(13), Recital 15
Electricity Balancing Network Code (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing), Article 2(8)
ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014
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