Głowacki Law Firm

Balancing Energy
European Union Electricity Market Glossary

 

"Balancing energy" in the European Union Internal Electricity Market means energy used by Transmission System Operators (TSOs) to perform balancing and provided by the balancing service provider (BSP) (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (further referred to as the Network Code on Electricity Balancing, NC EB or EB GL), Article 2(4)).

 

This definition is also used by the upcoming legislation of the so-called 'Winter Energy Package' (Article 2(2)(j) 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), which, however, omits the reference to the BSP - 'balancing energy' means energy used by transmission system operators to perform balancing).

 

Balancing energy is also defined in Article 2(9) of Commission Implementing Regulation No 1348/2014 of 17 December 2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency for the purposes of REMIT reporting where it means “energy used by TSOs to perform balancing”.

 

The Commission Staff Working Document accompanying the document Commission Regulation of 23.11.2017 establishing a guideline on electricity balancing ({SWD(2017) 383 final}, p. 3) defines the balancing energy as the energy activated by TSOs to maintain the balance between injections and withdrawals in real time.

 

ACER's Recommendation No 03/2015 of 20 July 2015 on the Network Code on Electricity Balancing underlines the fact the origin of the balancing energy can be a Power Generating Facility or Demand Facility.

 

A pan-European exchange of balancing energy is envisioned, but, due to the scale and complexity of this task, a phased approach has been adopted. 

 

This approach is to allow coordination on a regional basis first (thus the development of the coordinated balancing area (CoBA) concept), followed by a merging of these regional initiatives. 

 

Each region should thus be mindful of the developments in other regions and should follow a similar structure so that wider coordination can easily be achieved later.

 

The settlement between TSO and a BSP of energy from a frequency containment reserve (FCR) is left optional in the Network Code on Electricity Balancing due to potentially small volumes of capacity and activated energy and the possible difficulties for measurement associated to the FCR process.

 

This settlement of balancing energy from the frequency restoration reserve (FRR) is obligatory.

 

quote

 

ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014, p. 21

 

 

There are a number of steps involved in the procurement of balancing energy.

 

Balancing energy bids can be placed either on a local or regional TSO procurement platform by both providers of contracted balancing capacity or BSPs who have no contracted reserves (e.g. demand, renewable generation units, and variable and smaller generation units).

 

These balancing energy bids can be updated until balancing energy gate closure time.

 

After Intraday Cross Zonal Gate Closure Time and before balancing energy gate closure time, the BSPs can continue to change their Balancing Energy bids which were previously submitted or submit new bids.

After the balancing energy gate closure time their Balancing Energy bids can only be changed after approval of all TSOs of the relevant CoBA.

 

The TSO procurement platform sends the Balancing Energy bids with the corresponding energy price to the common bid collection function (where multiple Balancing Energy procurement platforms exist) which then builds the Common Merit Order List.

 

This Common Merit Order List is part of the input for the central Activation Optimisation Function. A confirmation is sent back to the local tendering system. This process establishes the need for a harmonised pricing method which may be either marginal pricing or pay-as-bid.

 

The settlement of balancing energy from the non-obligatory reserve replacement process (see replacement reserve (RR)) is only applicable for where this process has been implemented.

 

Each BSP intending to provide balancing energy is required to pass a qualification process defined by the TSOs in close cooperation with Distribution System Operators (DSOs) where necessary (Recital 9 of the NC EB).

 

According to Article 29(2) of the said Regulation (EU) 2017/2195 TSOs shall not activate balancing energy bids before the corresponding balancing energy gate closure time, except in the alert state or the emergency state when such activations help alleviate the severity of these system states and except when the bids serve purposes other than balancing.

 

The submission by a BSP of balancing energy bids 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).

 

 

Balancing Energy Standard Products

  

 

See detailed remarks on the characteristics of Standard Products for the Balancing Energy in the EU Internal Electricity Market.

 

 

Balancing Energy Activation Mechanism

 

 

Legal requirements for the balancing energy activation mechanism are described in Article 29 of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing.

 

According to Article 29(7) of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 the activation of balancing energy bids is to be based on a TSO-TSO model with a common merit order list.

 

The ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014 describes the activation mechanism for balancing energy as follows (p. 57, 58):

 

"The main goal is to assure the most efficient way of activating Balancing Energy through a transparent, non-discriminatory, fair and objective process while taking into account technical and network constraints. It will be done by the Activation Optimisation Function based on Common Merit Order Lists. These Common Merit Order Lists will be established by TSOs for each Standard Product as defined in the NC EB and will be also separated for upward and downward bids.

 

These separations between Common Merit Order Lists are necessary in order to control the processes and can be considered to be the lowest level of optimisation. If there is the need to create more than one Common Merit Order List for a Standard Product for Balancing Energy then TSOs are also allowed to establish these lists. The reasons for this could be, e.g. the amount of bids that have to be processed, local needs of TSOs that otherwise could not be tackled without complicating the whole process and risking the performance of the process. After establishing the Common Merit Order Lists the TSOs will use them as follows:

 

- The TSOs will send all the bids for each Standard Product they previously collected from BSPs within their Responsibility Area or Scheduling Area to the Activation Optimisation Function, which includes the Common Merit Order Lists. This has to be done up to the Balancing Energy Gate Closure Time as defined by TSOs based on the technical characteristics of the relevant Standard Product for Balancing Energy, e.g. depending on the activation time.

 

- After sending all the bids, each TSO will also send its activation request for Balancing Energy to that Activation Optimisation Function. The relevant Common Merit Order Lists are developed based on these bids, the technical characteristics of the requested Balancing Energy and request for Balancing Energy.

 

- After creating the Common Merit Order Lists, the Matching of the bids will be done automatically by the Activation Optimisation Function. The Matching includes the optimisation process of Cross Zonal Capacity as well.

 

- After the Matching, the TSOs will receive a confirmation of telling the TSOs which of its bids and offers are accepted. In respect of the accepted bids, the TSOs have to activate the relevant BSPs. The BSPs are obliged to deliver the relevant Balancing Energy.

 

- Once bids have been accepted, the TSOs have to know if the requested amounts of Balancing Energy will be delivered or if additional steps have to be undertaken by some TSOs to fulfil the individual security needs.

 

These functions have to at least take into account all relevant Balancing Energy bids and requests that are provided to the relevant Common Merit Order Lists by the TSOs. Also the available Cross Zonal Capacity has to be taken into account in order to allow for a firm delivery of the activated Balancing Energy."

 

On 12 September 2018 ENTSO-E has published two documents dealing with the methodology for the activation purposes of balancing energy bids:

 

- All TSOs’ proposal for classification methodology for the activation purposes of balancing energy bids pursuant to Article 29(3) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing, and

 

- Explanatory Document to all TSOs’ proposal for classification methodology for the activation purposes of balancing energy bids pursuant to Article 29(1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing.

 

Article 3 of the said ENTSO-E proposal foresees that the TSO activating the bid from the common merit order list shall use the following activation purposes:

 

(a) balancing;

 

(b) system constraints.

 

For balancing, the reason for activating a standard balancing energy product bid is the mismatch between the scheduled and the actual or forecasted position on system level. The total imbalance reflects the imbalances on balance responsible parties (BRPs) level.

 

For the system constraints, the reason for activating a standard balancing energy product bid is a reason different than the mismatch between the scheduled and the actual or forecasted position on system level such as, at least, (i) process congestions, or (ii) rebuild system margin so as to ensure enough margin and/or avoid entering into alert state.

 

Moreover, ENTSO-E document mentions that the TSOs are allowed to use all standard balancing energy bids for balancing purposes, whereas TSOs are alowed to use standard RR and mFRR (manually-activated FRR) balancing energy product bids for balancing and system constraint purposes.

 

 

Balancing Energy Price

 

 

It is often argued that the balancing energy price should be related to the day-ahead (DA) electricity price in order to indicate the actual costs of activating balancing energy.

 

This is because the difference between these two prices can be regarded as the opportunity costs for BRPs for not balancing their portfolio on the day before delivery (assuming that these costs are fully reflected in imbalance charges).

 

This price difference is a useful indicator of the social costs of balancing, and can be applied both for upward and downward balancing energy.

 

In theory this comparison should be made with the intra-day (ID) market price, as this is the nearest alternative for BRPs to balance their portfolio before real time.

 

However, the number of liquid intraday markets with reliable intraday prices is limited in Europe, so the comparison is mostly made by regulators with day-ahead prices (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015p. 209).

 

It is also the ACER's recommendation (contained in the aforementioned Annual Report of November 2015 (p. 214, 217)) to implement a pricing method based on marginal pricing for balancing energy.

 

The said Report observes, however, some EU Member States such as Austria, Belgium, Croatia, Germany, Italy, Slovakia and Slovenia apply "pay as bid" rules in balancing energy regimes. 

 

This, according to ACER, provides weak incentives, as opposed to marginal pricing, where prices can be much higher and therefore better able to compensate for the fixed costs of peak plant. 

 

ACER argues, moreover, that during the balancing timeframe, it is important to have prices which reflect the adequate value of electricity in order to send the appropriate scarcity signals to the market and ensure that supply responds to demand.

 

The aforementioned ACER's recommendation for the implementation of a pricing method based on marginal pricing for balancing energy has been reflected in Article 5(5) 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) - so called: Winter Energy Package), which, moreover, envisions that market participants must be allowed to bid as close to real time as possible, and at least after the intraday cross-zonal gate closure time.

 

Article 5(10) of the said Proposal also stipulates that TSOs are required to publish close to real-time information on the the balancing energy price (as well as on the imbalance price and on the current balancing state of TSO's control areas).

 

Annual Report of the ACER and CEER on the Results of Monitoring the Internal Electricity and Gas Markets in 2016 (Electricity Wholesale Markets Volume) published in October 2017 confirms the persistence of large disparities in balancing energy prices in Europe in 2016 (p. 49). 

 

The said Report of October 2017 observes the EU Member States applying price regulation appear to be among those with the lowest unit costs of activating balancing energy in Europe (p. 50).

 

This includes:

 

- Slovakia, where price regulation applies to the energy activated from all types of reserves,


- the Czech Republic, where price regulation applies to the energy activated from automatically activated frequency restoration reserves (aFRRs), and


- France, where price regulation applies to the energy activated from FCRs and from aFRRs, accounting for approximately 30% of activations in the French system.

 

However, in the ACER’s opinion, lowering artificially the balancing energy procurement costs through price regulation is counter-productive.

 

The target should not be to guarantee the lowest possible balancing energy prices, but to ensure efficient price formation, i.e. prices reflecting the ‘true’ value of flexibility.

 

ACER underlines in the above Report of October 2017, that in general, price regulation is a barrier to balancing energy prices to reflect this value, and therefore fails to attract the adequate investments in flexible resources from either generation or demand assets.

 

Moreover, relatively low (average) balancing energy procurement costs can be observed in countries without price regulation such as for Germany, the Netherlands, the whole Nordic area and Switzerland.

 

The said ACER’s Report of October 2017 observes that several EU Member States, including Austria, Belgium, Croatia, Germany, Hungary, Italy, Slovakia and Slovenia still apply ‘pay-as-bid’ rules in their balancing energy regimes.

 

ACER concludes, priority should be given to removing those elements of balancing market design that impede the free fluctuation of balancing energy prices.

 

This includes, inter alia, the inefficient procurement of balancing capacity, the application of regulated prices or of pricing methods that are not based on marginal pricing.

 

All in all, balancing energy bids will compete on EU-wide balancing platforms, hence, it will also have positive effects on competition (Recital 5 of the NC EB).

 

 

Transparency requirements

 

 

According to Article 12(3)(b)-(e) of the NC EB each TSO is required to publish:

 

1. information on all balancing energy bids from its scheduling area or scheduling areas, anonymised where necessary, no later than 30 min after the end of the relevant market time unit. The information shall include:
(i) type of product;
(ii) validity period;
(iii) offered volumes;
(iv) offered prices;
(v) information on whether the bid was declared as unavailable;

 

2. information on whether the balancing energy bid was converted from a specific product or from an integrated scheduling process no later than 30 min after the end of the relevant market time unit;

 

3. information regarding how balancing energy bids from specific products or from integrated scheduling process have been converted into balancing energy bids from standard products no later than 30 min after the end of the relevant market time unit;

 

4. aggregated information on balancing energy bids no later than 30 min after the end of the relevant market time unit, which shall include:
(i) total volume of offered balancing energy bids;
(ii) total volume of offered balancing energy bids separately per type of reserves;
(iii) total volume of offered and activated balancing energy bids separately for standard and specific products;
(iv) volume of unavailable bids separately per type of reserves.

 

A TSO may withhold the publication of information on offered prices and volumes of balancing energy bids if justified for reasons of market abuse concerns and if not detrimental to the effective functioning of the electricity markets.

 

A TSO shall report such withholdings at least once a year to the relevant regulatory authority.

 

No later than two years after entry into force of the NC EB, each TSO is required publish the above information in a commonly agreed harmonised format at least through the information transparency platform established pursuant to Article 3 of Regulation (EU) No 543/2013.

 

 

Requirements for the procurement of balancing energy

 

 

Article 44(2) of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 stipulates that TSOs do not incur economic gains or losses with regard to the financial outcome of settlements of balancing energy and that any positive or negative financial outcome as a result of the above settlements must be passed on to network users in accordance with the applicable national rules.

 

Requirements for the procurement of balancing energy are stipulated in Articles 29 - 31 of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 - see box.

 

 

 

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

 

Article 29
Activation of balancing energy bids from common merit order list


1.   In order to maintain the system's balance in accordance with Article 127, Article 157 and Article 160 of Regulation (EU) 2017/1485, each TSO shall use cost-effective balancing energy bids available for delivery in its control area based on common merit order lists or another model as set with the proposal by all TSOs pursuant to paragraph 5 of Article 21.


2.   TSOs shall not activate balancing energy bids before the corresponding balancing energy gate closure time, except in the alert state or the emergency state when such activations help alleviate the severity of these system states and except when the bids serve purposes other than balancing pursuant to paragraph 3.


3.   By one year after the entry into force of this Regulation, all TSOs shall develop a proposal for a methodology for classifying the activation purposes of balancing energy bids. This methodology shall:
(a) describe all possible purposes for the activation of balancing energy bids;
(b) define classification criteria for each possible activation purpose.


4.   For each balancing energy bid activated from the common merit order list, the TSO activating the bid shall define the activation purpose based on the methodology pursuant to paragraph 3. The activation purpose shall be notified and visible to all TSOs through the activation optimisation function.


5.   In the event that the activation of balancing energy bids deviates from the results of the activation optimisation function, the TSO shall publish the information about the reasons for the occurrence of such deviation in a timely manner.


6.   The request for activation of a balancing energy bid from the activation optimisation function shall oblige the requesting TSO and connecting TSO to accept the firm exchange of balancing energy. Each connecting TSO shall ensure the activation of the balancing energy bid selected by the activation optimisation function. The balancing energy shall be settled pursuant to Article 50 and between the connecting TSO and the balancing service provider pursuant to Chapter 2 of Title V.


7.   The activation of balancing energy bids shall be based on a TSO-TSO model with a common merit order list.


8.   Each TSO shall submit all necessary data for the operation of the algorithm in paragraphs 1 and 2 of Article 58 to the activation optimisation function in accordance with the rules established pursuant to Article 31( 1).


9.   Each connecting TSO shall submit, prior to the TSO energy bid submission gate closure time, all balancing energy bids received from balancing service providers to the activation optimisation function, taking into account the requirements in Articles 26 and 27. The connecting TSOs shall not modify or withhold balancing energy bids, except for:
(a) balancing energy bids related to Articles 26 and 27;
(b) balancing energy bids that are manifestly erroneous and include an unfeasible delivery volume;
(c) balancing energy bids that are not forwarded to the European platforms in accordance with paragraph 10.


10.   Each TSO applying a self-dispatching model and operating within a scheduling area with a local intraday gate closure time after the balancing energy gate closure time pursuant to Article 24 may develop a proposal to limit the amount of bids that is forwarded to the European platforms pursuant to Articles 19 to 21. The bids forwarded to the European platforms shall always be the cheapest bids. This proposal shall include:
(a) the definition of the minimum volume that shall be forwarded to the European platforms. The minimum volume of bids submitted by the TSO shall be equal to or higher than the sum of the reserve capacity requirements for its LFC block according to Articles 157 and 160 of Regulation (EU) 2017/1485 and the obligations arising from the exchange of balancing capacity or sharing of reserves;
(b) the rules to release the bids that are not submitted to the European platforms and the definition of the point in time at which the concerned balancing service providers shall be informed of the release of its bids.


11.   At least once every two years after the approval of the proposal in paragraph 10 by the respective regulatory authority, all TSOs shall assess the impact of limiting the volume of bids sent to the European platforms and the functioning of the intraday market. This assessment shall include:
(a) an evaluation by the relevant TSOs on the minimum volume of bids that shall be forwarded to the European platforms pursuant to paragraph 10(a);
(b) a recommendation to the relevant TSOs limiting balancing energy bids.
Based on this assessment, all TSOs shall make a proposal to all regulatory authorities to review the minimum volume of balancing energy bids that shall be forwarded to the European platforms pursuant to paragraph 10(a).


12.   Each requesting TSO may request the activation of balancing energy bids from the common merit order lists up to the total volume of balancing energy. The total volume of balancing energy that can be activated by the requesting TSO from balancing energy bids from the common merit order lists is calculated as a sum of volumes of:
(a) balancing energy bids submitted by the requesting TSO not resulting from sharing of reserves or exchange of balancing capacity;
(b) balancing energy bids submitted by other TSOs as a result of balancing capacity procured on behalf of the requesting TSO;
(c) balancing energy bids resulting from the sharing of reserves under the condition that the other TSOs participating in the sharing of reserves have not already requested the activation of those shared volumes.


13.   All TSOs may establish in the proposals for the implementation frameworks for the European platforms pursuant to Articles 19, 20 and 21 the conditions or situations in which the limits set out in paragraph 12 shall not apply. When a TSO requests balancing energy bids beyond the limit set out in paragraph 12, all other TSOs shall be informed.


14.   Each TSO may declare the balancing energy bids submitted to the activation optimisation function unavailable for the activation by other TSOs because they are restricted due to internal congestion or due to operational security constraints within the connecting TSO scheduling area.


Article 30
Pricing for balancing energy and cross-zonal capacity used for exchange of balancing energy or for operating the imbalance netting process


1.   By one year after the entry into force of this Regulation, all TSOs shall develop a proposal for a methodology to determine prices for the balancing energy that results from the activation of balancing energy bids for the frequency restoration process pursuant to Articles 143 and 147 of Regulation (EU) 2017/1485, and the reserve replacement process pursuant to Articles 144 and 148 of Regulation (EU) 2017/1485. Such methodology shall:
(a) be based on marginal pricing (pay-as-cleared);
(b) define how the activation of balancing energy bids activated for purposes other than balancing affects the balancing energy price, while also ensuring that at least balancing energy bids activated for internal congestion management shall not set the marginal price of balancing energy;
(c) establish at least one price of balancing energy, for each imbalance settlement period;
(d) give correct price signals and incentives to market participants;
(e) take into account the pricing method in the day-ahead and intraday timeframes.


2.   In case TSOs identify that technical price limits are needed for efficient functioning of the market, they may jointly develop as part of the proposal pursuant to paragraph 1 a proposal for harmonised maximum and minimum balancing energy prices, including bidding and clearing prices, to be applied in all scheduling areas. In such a case, harmonised maximum and minimum balancing energy prices shall take into account the maximum and minimum clearing price for day-ahead and intraday timeframes pursuant to Regulation (EU) 2015/1222.


3.   The proposal pursuant to paragraph 1 shall also define a methodology for pricing of cross-zonal capacity used for exchange of balancing energy or for operating the imbalance netting process. Such methodology shall be consistent with the requirements established under Regulation (EU) 2015/1222, and:
(a) reflect market congestion;
(b) be based on the prices for balancing energy from activated balancing energy bids, determined in accordance either with the pricing method pursuant to paragraph 1(a), or if applicable, the pricing method pursuant to paragraph 5;
(c) not apply any additional charges for the exchange of balancing energy or for operating the imbalance netting process, except a charge to compensate losses if this charge is also taken into account in other timeframes.


4.   The harmonised pricing method defined in paragraph 1 shall apply to balancing energy from all standard and specific products pursuant to Article 26(3)(a). For specific products pursuant to Article 26(3)(b), the concerned TSO may propose a different pricing method in the proposal for specific products pursuant to Article 26.


5.   Where all TSOs identify inefficiencies in the application of the methodology proposed pursuant to paragraph 1(a), they may request an amendment and propose a pricing method alternative to the pricing method in paragraph 1(a). In such case, all TSOs shall perform a detailed analysis demonstrating that the alternative pricing method is more efficient.


Article 31
Activation optimisation function


1.   All TSOs shall establish an activation optimisation function in accordance with Article 29 and this Article for the optimisation of the activation of balancing energy bids from different common merit order lists. This function shall take into account at least:
(a) activation processes and technical constrains from different balancing energy products;
(b) operational security;
(c) all balancing energy bids included in the compatible common merit order lists;
(d) the possibility to net the counteracting activation requests from TSOs;
(e) submitted activation requests of all TSOs;
(f) available cross-zonal capacity.


2.   Common merit order lists shall consist of balancing energy bids from standard products. All TSOs shall establish the necessary common merit order lists for the standard products. Upward and downward balancing energy bids shall be separated in different common merit order lists.


3.   Each activation optimisation function shall use at least one common merit order list for upward balancing energy bids and one common merit order list for downward balancing energy bids.


4.   TSOs shall ensure that the balancing energy bids submitted to the common merit order lists are expressed in euros and make reference to the market time unit.


5.   Depending on the requirement for standard products for balancing energy, TSOs may create more common merit order lists.


6.   Each TSO shall submit its activation requests for balancing energy bids to the activation optimisation function.


7.   The activation optimisation function shall select balancing energy bids and request the activation of selected balancing energy bids from the connecting TSOs where the balancing service provider, associated with the selected balancing energy bid, is connected.


8.   The activation optimisation function shall submit the confirmation of the activated balancing energy bids to the TSO requesting the activation of the balancing energy bids. The activated balancing service providers shall be responsible for delivering the requested volume until the end of the delivery period.


9.   All TSOs that operate the frequency restoration process and the reserve replacement process to balance their LFC area shall strive to use all balancing energy bids from relevant common merit order lists to balance the system in the most efficient way, taking into account operational security.


10.   TSOs that do not use the reserve replacement process to balance their LFC area shall strive to use all balancing energy bids from relevant common merit order lists for frequency restoration reserves to balance the system in the most efficient way, taking into account operational security.


11.   Except in the normal state, TSOs may decide to balance the system using only the balancing energy bids from balancing service providers in its own control area if such decision helps alleviate the severity of the current system state. The TSO shall publish a justification for such decision without undue delay.

 

 

 

Settlement of balancing energy

 

 

Requirements for the settlement of balancing energy are stipulated in Articles 45 - 49 of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 - see box.

 

Each TSO calculates the activated volume of balancing energy at least for:


(a) each imbalance settlement period (ISP):


(b) its imbalance areas;


(c) each direction, with a negative sign indicating relative withdrawal by the balancing service provider, and a positive sign indicating relative injection by the balancing service provider.


Each connecting TSO settles all activated volumes of balancing energy calculated pursuant to the above rules with the concerned balancing service providers.

 

 

 

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

 

Article 45

Balancing energy calculation

 

1. As regards the settlement of balancing energy for at least the frequency restoration process and the reserve replacement process, each TSO shall establish a procedure for:
(a) the calculation of the activated volume of balancing energy based on requested or metered activation;
(b) claiming the recalculation of the activated volume of balancing energy.


2. Each TSO shall calculate the activated volume of balancing energy according to the procedures pursuant to paragraph 1(a) at least for:
(a) each imbalance settlement period;
(b) its imbalance areas;
(c) each direction, with a negative sign indicating relative withdrawal by the balancing service provider, and a positive sign indicating relative injection by the balancing service provider.


3. Each connecting TSO shall settle all activated volumes of balancing energy calculated pursuant to paragraph 2, with the concerned balancing service providers.


Article 46

Balancing energy for frequency containment process

 

1. Each connecting TSO may calculate and settle the activated volume of balancing energy for the frequency containment process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45.


2. The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency containment process shall be defined for each direction as defined in Table 1:

 

 

Table 1

Payment for balancing energy

 

  Balancing energy price positive Balancing energy price negative
Positive balancing energy Payment from TSO to BSP Payment from BSP to TSO
Negative balancing energy Payment from BSP to TSO  Payment from TSO to BSP

 

 

Article 47

Balancing energy for frequency restoration process

 

1. Each connecting TSO shall calculate and settle the activated volume of balancing energy for the frequency restoration process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45


2. The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency restoration process shall be defined for each direction pursuant to Article 30 as defined in the Table 1.


Article 48

Balancing energy for reserve replacement process

 

1. Each connecting TSO shall calculate and settle the activated volume of balancing energy for the reserve replacement process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45.


2. The price, be it positive, zero or negative, of the activated volume of balancing energy for reserve replacement process shall be defined for each direction pursuant to Article 30 as defined in the Table 1.


Article 49

Imbalance adjustment to the balance responsible party

 

1. Each TSO shall calculate an imbalance adjustment to be applied to the concerned balance responsible parties for each activated balancing energy bid.


2. For imbalance areas where several final positions for a single balance responsible party are calculated pursuant to Article 54(3), an imbalance adjustment may be calculated for each position.


3. For each imbalance adjustment, each TSO shall determine the activated volume of balancing energy calculated pursuant to Article 45 and any volume activated for purposes other than balancing.

 

 

 

 

 

 

 

 

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    Documentation    

 

 

 

 

 

Network Code on Electricity Balancing (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing), Article 2(4), Articles 29 - 31, Article 44(2), Articles 45 - 49

 

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

 

Commission Implementing Regulation No 1348/2014 of 17 December 2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency

 

The proposal of all Transmission System Operators performing the reserve replacement for the implementation framework for the exchange of balancing energy from Replacement Reserves in accordance with Article 19 of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, ENTSO-E, 21 February 2018

 

Explanatory Document to the proposal of all Transmission System Operators performing the reserve replacement for the implementation framework for the exchange of balancing energy from Replacement Reserves in accordance with Article 19 of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, ENTSO-E, 21 February 2018

 

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)(j)

 

ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014, p. 21, 57, 58

 

ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015p. 209

 

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

 

 

 

 

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Last Updated on Thursday, 01 November 2018 13:12
 

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