Imbalance Netting
European Union Electricity Market Glossary





According to Article 3(2)(128) of the Network Code on System Operation the 'Imbalance Netting Process' is a process agreed between Transmission System Operators (TSOs) that allows avoiding the simultaneous activation of Frequency Restoration Reserve (FRR)  in opposite directions, taking into account the respective FRCEs as well as the activated FRR and by correcting the input of the involved FRPs accordingly.




- ‘frequency restoration control error’ or ‘FRCE’ means the control error for the FRP which is equal to the ACE of a LFC area or equal to the frequency deviation where the LFC area geographically corresponds to the synchronous area (Article 3(2)(43) of the Network Code on System Operation),


- ‘frequency restoration process’ or ‘FRP’ means a process that aims at restoring frequency to the nominal frequency and, for synchronous areas consisting of more than one LFC area, a process that aims at restoring the power balance to the scheduled value (Article 3(2)(42) of the Network Code on System Operation),


- ‘area control error’ or ‘ACE’ means the sum of the power control error (‘ΔP’), that is the real-time difference between the measured actual real time power interchange value (‘P’) and the control program (‘P0’) of a specific LFC area or LFC block and the frequency control error (‘K*Δf’), that is the product of the K-factor and the frequency deviation of that specific LFC area or LFC block, where the area control error equals ΔP+K*Δf (Article 3(2)(19) of the Network Code on System Operation).


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 proposed that the Regional Integration Model (RIM) for the Imbalance Netting Process should be composed of single Coordinated Balancing Area (CoBA) covering the whole Continental Europe Synchronous Area.


This proposal considers that Imbalance Netting in other Synchronous Areas is already implicitly implemented.


The Continental-wide coverage should ensure the necessary consistency between CoBA proposed for automatic Frequency Restoration Reserve (FRR) and manual FRR and the CoBA for Imbalance Netting.


An increased utilisation of Imbalance Netting has been recently observed in Europe. Imbalance Netting currently covers an important share of the needs of balancing energy in several European markets.


Pursuant to data referred to in the ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015 (p. 213), in the Netherlands Imbalance Netting avoided almost 50% of the electricity system's needs of Balancing Energy in 2014 (the same figure is quoted by the ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Markets in 2015, September 2016 (p. 59) for the year 2015).


In the Nordic region, where balancing energy markets are currently integrated, Imbalance Netting across borders is currently used to balance the electricity systems.


However, it should be noted that the Nordic electricity systems are balanced as one single Responsibility Area and, the cross-border exchange of balancing energy cannot be easily disentangled from Imbalance Netting across borders and from system imbalance at the (national) Transmission System Operators (TSOs) level.


Furthermore, according to Articles 21 and 22 of the draft Network Code included in Annex II to the Agency Recommendation on the Network Code on Electricity Balancing, it is envisaged that the Imbalance Netting Process will become obligatory in the future.


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.




IMG 0744






Network Code on System Operation, Article 3(2)(128)










ENTSO-E website on imbalance netting


LFC Areas













Add your comment

Your name:
Your website:
Last Updated on Tuesday, 12 September 2017 22:32


Copyright © 2009 - 2017 Michal Glowacki. All rights reserved.
The materials contained on this website are for general information purposes only and are subject to the disclaimer