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.

 

 

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)

 

'balancing service provider' means a market participant providing either or both balancing energy and balancing capacity to transmission system operators

 

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).

 

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 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,

 

 

"BSPs have to pass a pre-qualification test of the Connecting TSO in order to be able to participate to the procurement processes. Once qualified, BSPs must submit their service proposals prior to a deadline named procurement gate closure time. This procurement gate closure time can vary depending on a number of factors including product and location.

 

BSPs which have been selected in the procurement of Balancing Capacity are then obliged to submit the services for relevant volumes and time period they have been selected for.

 

However, in addition to this requirement, any BSP can submit bids for Balancing Energy regardless of whether or not they have been contracted for Balancing Capacity or not.

 

All the Balancing Energy bids have to be provided before a deadline which is close to real-time, namely the Balancing Energy Gate Closure Time. 

 

Finally, as a general requirement, it is mandatory that for a given product the Reserve Providing Unit, Reserve Providing Group, Demand Units or aggregators and the associated BRP to be in the same Responsibility Area or Scheduling Area where appropriate"

 

Supporting Document for the Network Code on Electricity Balancing of 23 December 2013 and the amended version of 6 August 2014

 

(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.

 

 


 

 

 

 

Independent BSP

 

 

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.

 

 

 

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)(ck)

 

 

 

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Last Updated on Sunday, 01 January 2017 15:35
 

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