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Balance Responsible Parties (BRPs)
European Union Electricity Market Glossary

 

 

 

‘Balance Responsible Party’ (BRP) is a market participant or its chosen representative responsible for its imbalances (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, Article 2(7)).

 

It is underlined in Article 17(1) and (2) of the said Regulation that each BRP must strive to be balanced in real time, and that BRP is financially responsible for the imbalances to be settled with the connecting TSO.

 

The same definition of the BRP is used in the so-called 'Winter Energy Package' (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.

 

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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 Commission Staff Working Document accompanying the document Commission Regulation of 23.11.2017 establishing a guideline on electricity balancing {SWD(2017) 383 final}.

  

Simply put, BRPs - such as producers and suppliers - keep their individual supply and demand in balance in commerical terms.

 

Given 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.

 

If a participant has a short position, this means that the difference between the contractual value and metered position has contributed to a deficit of electricity flowing into the system.

 

If a participant has a long position, this means that the difference between the contractual value and metered position has contributed to a surplus of electricity flowing on to the system.

 

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 (BSP) is assigned to one or more Balance Responsible Parties.

 

According to Article 18(6) and (7) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, the terms and conditions developed by each Transmission System Operator (TSO) for BRPs must contain:

 

(a) the definition of balance responsibility for each connection in a way that avoids any gaps or overlaps in the balance responsibility of different market participants providing services to that connection;

 

(b) the requirements for becoming a BRP;

 

(c) the requirement that all BRPs must be financially responsible for their imbalances, and that the imbalances be settled with the connecting TSO;

 

(d) the requirements on data and information to be delivered to the connecting TSO to calculate the imbalances;

 

(e) the rules for BRPs to change their schedules prior to and after the intraday energy gate closure time;

 

(f) the rules for the settlement of BRPs;

 

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

 

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.

  

(g) the delineation of an imbalance area and an imbalance price area;

 

(h) a maximum period for the finalisation of the settlement of imbalances with BRPs for any given imbalance settlement period;

 

(i) the consequences in case of non-compliance with the terms and conditions applicable to BRPs;

 

(j) an obligation for BRPs to submit to the connecting TSO any modifications of the position;

 

(k) the settlement rules;

 

(l) where existing, the provisions for the exclusion of imbalances from the imbalance settlement when they are associated with the introduction of ramping restrictions for the alleviation of deterministic frequency deviations.

 

Each connecting TSO may include in the proposal for the terms and conditions for BRPs specific requirements with regard to the position of BRPs submitted after the day-ahead market timeframe to ensure that the sum of their internal and external commercial trade schedules equals the sum of the physical generation and consumption schedules, taking into account electrical losses compensation, where relevant.

 

The provision by a BRPs of a balanced position at the end of the day-ahead timeframe and the provision of modifications of the position of BRPs may be temporarily suspended by TSO in situations indicated in Article 35 of the Commission Regulation (EU) 2017/2196 of 24 November 2017 establishing a network code on electricity emergency and restoration - NC ER).

 

According to Article 15(1) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, Distributon System Operators (DSOs), TSOs, BSPs and BRPs are required to cooperate in order to ensure efficient and effective balancing.

 

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 that BRPx 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.

 

The problem has been finally determined in Article 17(3) and (4) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - as in the box.





 

Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing

 

Article 17
Role of balance responsible parties


1.   In real time, each balance responsible party shall strive to be balanced or help the power system to be balanced. The detailed requirements concerning this obligation shall be defined in the proposal for terms and conditions related to balancing set up pursuant to Article 18.


2.   Each balance responsible party shall be financially responsible for the imbalances to be settled with the connecting TSO.


3.   Prior to the intraday cross-zonal gate closure time, each balance responsible party may change the schedules required to calculate its position pursuant to Article 54. TSOs applying a central dispatching model may establish specific conditions and rules for changing the schedules of a balance responsible party in the terms and conditions related to balancing set up pursuant to Article 18.


4.   After the intraday cross-zonal gate closure time, each balance responsible party may change the internal commercial schedules required to calculate its position pursuant to Article 54 in accordance with the rules set out in the terms and conditions related to balancing set up pursuant to Article 18. 

 

 

 

 

 

 

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    Documentation    

 

 

 

 

 

Electricity Balancing Network Code (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing), Article 2(7), Article 17, Article 18(6), Article 18(7)

 

Network Code on Emergency and Restoration (Commission Regulation (EU) 2017/2196 of 24 November 2017 establishing a network code on electricity emergency and restoration - NC ER), Article 35 

 

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)

 

Recommendation No 03/2015 of 20 July 2015 on the Network Code on Electricity Balancing

 

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

 

 

 

 

 

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Last Updated on Wednesday, 17 January 2018 22:52
 

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