|Balancing Service Provider (BSP)|
|European Union Electricity Market Glossary|
Balancing Service Provider (BSP) in the European Union Internal Electricty Market is a market participant providing Balancing Services to its Connecting TSO, or in case of the TSO-BSP Model, to its Contracting TSO.
The so-called 'Winter Package' defines a BSP as a market participant providing either or both Balancing Energy and Balancing Capacity to Transmission System Operators (TSOs) - Article 2(2)(k) 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).
Moreover, the terms and conditions related to Balancing developed by each TSO for its Responsibility Area or Scheduling Area must contain the rules for Balancing Service Providers including at least:
(a) the requirements for becoming a Balancing Service Provider,
(b) the conditions for the aggregation of Demand Side Response (DSR), the aggregation of generation units, or the aggregation of Demand Side Response and generation units within a Responsibility Area or Scheduling Area where appropriate to become a Balancing Service Provider where applicable,
(c) data and information required at both the pre-qualification stage and during operation,
(d) the modalities to identify the Balance Responsible Parties impacting the Imbalance Adjustment per Balancing Service product,
(e) the data and information required by the Connecting TSO to evaluate the provision of Balancing Services and to calculate imbalance,
(f) the requirements and rules including the approval process for the Transfer of Balancing Capacity,
(g) if applicable, the process of modifying Integrated Scheduling Process bids, and
(h) if applicable, the Integrated Scheduling Process Gate Closure Time.
Settlements between Transmission System Operators and Balancing Service Providers are among tasks and functions that are fundamental to the core objectives of ensuring operational security and integrating the balancing market and thus cannot be delegated or assigned by the TSOs to any third parties.
Key task related to TSO - BSP settlement is the calculation of activated volume of Balancing Energy.
TSO has information about activation times and amount as well as other relevant detailed information according the product specification e.g. about ramping.
Based on this information the total activated volume is calculated and for invoicing also price information about each activation needs to be included. In addition to Balancing Energy also Balancing Capacity is part of TSO-BSP settlement.
The aforementioned Supporting Document for the Network Code on Electricity Balancing reasons the above assignment constraints in the following way:
1. assignment of the said task to a third party tends not to bring any added value, because all the calculation has to be done anyway by the TSO to control invoicing. TSOs also monitor that (pre)qualification criteria as well as other Terms and Conditions are fulfilled.
2. In the event of any breaches, it is preferable that the TSO is in direct contact with the BSP.
3. A direct contractual relationship between TSOs and BSPs makes handling of such situations easier to manage and thus more efficient.
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 proposes that the price of Balancing Energy should not be predetermined by a contract for Balancing Capacity.
An exemption to this rule should only be allowed when accompanied by a clear justification demonstrating higher economic efficiency, the avoidance of distortion of Balancing Energy prices and providing insurance that such Balancing Energy bids in the Common Merit Order List (CMOL) reflect the real time price of energy.
The main reason for the above amendments is to provide a level playing field allowing them to set the price of balancing energy for all BSPs as close as possible to real time and at least until the intraday cross-zonal gate closure time.
The aforementioned ACER's Recommendation of 20 July 2015 suggests also the clarification that requirement on BSPs to offer their unused generation capacity or other balancing resources through Balancing Energy bids in the balancing markets after day-ahead market gate closure time is without prejudice to the possibility of BSPs to change their Balancing Energy bids prior to the balancing energy gate closure time due to trading within the intraday market.
Use of cross-zonal capacity by Balancing Service Providers
Draft Electricity Balancing Network Code envisions the rule that the BSPs which have a contract for balancing capacity with a TSO on the basis of a TSO-BSP Model have the right to use cross-zonal capacity for the exchange of balancing capacity if they are holders of physical transmission rights.
In such a case BSPs nominate their physical transmission rights for the exchange of balancing capacity to the concerned TSOs.
Such physical transmission rights provide the right to their holders to nominate the exchange of balancing energy to the concerned TSOs and will therefore be excluded from the application of the UIOSI principle.
The said ACER's Recommendation of 20 July 2015 is noteworthy for one more important point - ACER proposes to introduce a new provision to the Electricity Balancing Network Code related to the independent BSP.
The ACER acknowledges that providers of the demand-side response my face important entry barriers into the balancing services market and difficulties to compete on a level playing field in particular with energy suppliers.
For this reason the ACER proposes that, when such problems occur, the EU Member States or National Regulatory Authorities should mitigate them by either implementing adequate measures to mitigate entry barriers and ensure the demand-side response can compete on a level playing field or by enabling the provision of demand-side response independently of energy suppliers.
In this respect, the ACER has defined standard and harmonised requirements for provision of demand-side response independently of energy suppliers.
The requirements for the provision of demand-side independently of energy suppliers consist of:
– the provision that the BSP can provide the demand-side response service from the demand facility without the need for consent or a contract with the energy supplier of that demand facility or its BRP,
– the requirement that BSPs providing demand-side response independently of energy suppliers should be balance responsible,
– the requirements for TSOs to adjust the final position and determine the allocated volume for the BRP of the BSP and for the BRP of the energy supplier, and
–the requirement for TSOs to establish the financial settlement between the BRP of the BSP and BRP of the energy supplier.
ACER believes that such harmonised requirements on provision of demand-side response independently of energy suppliers should help to facilitate greater participating of demand-side response in the balancing market.
|Last Updated on Friday, 29 September 2017 20:37|