Exchange of Balancing Capacity
European Union Electricity Market Glossary




Exchange of balancing capacity means the process of procuring balancing capacity by a Transmission System Operator (TSO) in a different Responsibility Area or Scheduling Area when appropriate than the one in which the procured Balancing Service Provider is connected.


The Supporting Document for the Network Code on Electricity Balancing of 6 August 2014 explains the exchange of balancing capacity is an opportunity for a TSO(s) to procure part of its dimensioning requirement in another area (change of the geographical distribution of balancing capacity) and as such is not obligatory.


Hence, if a TSO decides together with another TSO to commonly procure balancing capacity a Coordinated Balancing Area (CoBA) needs to be established.


The exchange of reserves allows but does not oblige the TSO(s) of area A to place part of their reserves (FCR, FRR or RR) within the area B of other TSO(s) in order to ensure the provision of the required amount of balancing capacity.


The exchange of reserves changes the geographical distribution of balancing capacity without changing the total amount of balancing capacity in the system. 


In contrast the concept of sharing of reserves allows the TSO(s) of an area A and the TSOs of an area B to rely on the same reserves (FCR, FRR and RR) in order to ensure the provision of the required amount of  alancing capacity resulting from the dimensioning process.


The sharing of reserves changes the total amount of procured balancing capacity but not the dimensioning incident sizing, thereby also impacting the geographical distribution.


In case TSO(s) perform the exchange of balancing capacity, a cross zonal capacity needs to be ensured.


Article 15 (3) and (4) 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) stipulates that TSOs:


- are required to use the methodologies developed in network codes and guidelines on balancing, where applicable, to allocate cross-zonal capacity for the exchange of balancing capacity or sharing of reserves,


- must not increase the reliability margin calculated pursuant to Regulation (EU) 2015/1222 (CACM Guideline) due to the exchange of balancing capacity or sharing of reserves.






Capacity allocation




Last Updated on Tuesday, 14 March 2017 21:42


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