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Exchange of Balancing Energy
European Union Electricity Market Glossary

 

 

 

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)).

 

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 15(2) 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 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) and (3)

 

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.

 

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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.


 

 

 

 

 

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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 - NC EB), Article 2(24), Article 30(1) and (3)

 

All TSOs’ proposal on methodologies for pricing balancing energy and cross-zonal capacity used for the exchange of balancing energy or operating the imbalance netting process pursuant to Article 30(1) and Article 30(3), 12 September 2018

 

ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015p. 212 

 

 

 

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Last Updated on Sunday, 11 November 2018 20:22
 

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