Exchange of balancing energy means the activation of balancing energy bids for the delivery of balancing energy to a Transmission System Operator (TSO) in a different scheduling area than the one in which the activated Balancing Service Provider (BSP) is connected (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, Article 2(24)).
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7 February 2024 ACER has received the TSOs’ proposal to amend:
In relation to the pricing methodology, the TSOs are proposing to:
In terms of the aFRR implementation framework, the TSOs propose introducing the possibility of using an elastic demand. This would allow them to price a segment of their demand and therefore establish a threshold beyond which they are unwilling to activate balancing energy. This would improve the TSOs' ability to manage the balance between cost efficiency and the need for maintaining high-quality frequency.
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The target model for the exchange of balancing energy is based on a multilateral TSO-TSO Model with a common merit order list (CMOL) for manual frequency restoration reserve (FRR) and replacement reseve (RR).
An equivalent concept is envisaged for automatic FRR (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015, p. 212).
Article 17(3) a Regulation (EU) 2019/943 of 5 June 2019 of the European Parliament and of the Council on the internal market for electricity (recast) stipulates that when cross-zonal capacity is available after the intraday cross-zonal gate closure time TSOs must use the cross-zonal capacity for the exchange of balancing energy or for operating the imbalance netting process.
Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, Article 30
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: 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 Commission 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. |
Regulatory chronicle
7 February 2024
ACER has received the TSOs’ proposal to amend:
- the common methodology for harmonising the pricing balancing energy and cross-border capacity; and
- the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation (aFRR).
In relation to the pricing methodology, the TSOs are proposing to:
- Reduce the technical price limits of the integrated balancing energy markets from 99,999 to 15,000 EUR/MWh. This implies that balance service providers will not be allowed to bid below -15,000 EUR/MWh or above 15,000 EUR/MWh, after July 2026.
- Lower the transitional price limit (valid until July 2026) to 10,000 EUR/MWh. Similarly, during this transitional period, balance service providers will only be allowed to bid between the price range from -10,000 to 10,000 EUR/MWh.
- Use an alternative way to compute the prices from the PICASSO platform to better reflect the bids activated by the TSOs.
In terms of the aFRR implementation framework, the TSOs propose introducing the possibility of using an elastic demand. This would allow them to price a segment of their demand and therefore establish a threshold beyond which they are unwilling to activate balancing energy. This would improve the TSOs' ability to manage the balance between cost efficiency and the need for maintaining high-quality frequency.
28 February 2022
11 October 2021
15 July 2020
Annexes to the Decision 17/2020
24 January 2020
Annexes to the Decision 01/2020
18 December 2018
12 September 2018
Documentation
Network Code on Electricity Balancing (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - EBGL or NC EB), Article 2(24), Article 30
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