|European Union Electricity Market Glossary|
The purpose of the reform of imbalance netting process in the European electricity market is to reduce the overall volume of activated balancing reserves in Europe and the national balancing markets.
According to Article 3(2)(128) of the Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (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.
In the above definition:
- ‘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).
Article 146(9) of the Network Code on System Operation specifies further, where an LFC block consists of more than one LFC area and the reserve capacity on FRR as well as the reserve capacity on RR is calculated based on the LFC block imbalances, all TSOs of the same LFC block shall implement an imbalance netting process and interchange the maximum amount of imbalance netting power defined in Article 146(6) of the Network Code on System Operation with other LFC areas of the same LFC block.
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) TSOs level.
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 (p. 54) that in 2016 the utilisation of imbalance netting continued to be the most successfully applied tool to exchange balancing services across borders.
In 2016 the imbalance netting covered an important share of the needs of balancing energy in several European markets:
- in Latvia, the Netherlands and Germany, imbalance netting avoided 84%, 57% and 57%, respectively, of the electricity system’s balancing energy needs in 2016,
The application of imbalance netting and exchange of balancing energy was estimated in the said Report of October 2017 at approximately 19% of their potential in 2016 for a selection of 15 borders where sufficient information was available.
Although this value indicated a significant improvement (almost doubled) compared to the previous year, it was still relatively low when compared to the level of efficiency recorded in the preceding day-ahead (86%) and intraday (50%) timeframes in 2016.
Article 15(2) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), being part of the so-called ’Winter Energy Package’ of 30 November 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.
The Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (EBGL) also mentions the imbalance netting process in Article 37(1) where it states:
“After the intraday cross-zonal gate closure time, TSOs shall continuously update the availability of cross-zonal capacity for the exchange of balancing energy or for operating the imbalance netting process. Cross-zonal capacity shall be updated every time a portion of cross-zonal capacity has been used or when cross-zonal capacity has been recalculated.”
European platform for the imbalance netting process (IGCC, IN-Platform)
Recital 10 of the said Commission Regulation (EU) 2017/2195 underlines that the integration of balancing energy markets should be facilitated with the establishment of common European platforms for operating the imbalance netting process and enabling the exchange of balancing energy from frequency restoration reserves and replacement reserves.
The use of the European platform for the imbalance netting process (the IN-Platform) is compulsory for all TSOs of the Continental Europe synchronous area performing the automatic frequency restoration process.
The procedure for establishing the European platform for imbalance netting process is stipulated in Article 22 of the said Regulation - see box below.
On 15 January 2018 ENTSO-E has presented ”All TSOs’ proposal for the implementation framework for a European platform for the imbalance netting process in accordance with Article 22 of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing“.
The above proposal applies solely to the imbalance netting process, out of the scope are:
- the European platforms for frequency restoration reserves processes and replacement reserves (RR) process,
- the proposal for TSO-TSO settlement rules applicable to the imbalance netting process pursuant to Article 50 of said Commission Regulation (EU) 2017/2195 of 23 November 2017.
The implementation project chosen by ENTSO-E in February 2016 to become the future European Platform for the imbalance netting process (IN-Platform), is the International Grid Control Cooperation (IGCC).
IGCC was launched in October 2010 as a regional project and covers 20 countries (23 TSOs) across continental Europe, including all those that are required to implement the IN-Platform according to the said Commission Regulation (EU) 2017/2195.
Among IGCC’s 20 member TSOs are: AT (APG), BE (Elia), CH (Swissgrid), CZ (CEPS), DE (50Hz, Amprion, TenneT DE, TransnetBW), DK (Energinet), EL (ADMIE), FR (RTE), HR (HOPS), IT (Terna), NL (TenneT NL), PL (PSE), PT (REN), RO (Transelectrica), RS (EMS), SI (ELES) and ES (REE), and 3 observer TSOs are BG (ESO), HU (MAVIR) and SK (SEPS).
It is foreseen that the implementation of the European platform for the exchange of balancing energy from the frequency restoration reserve with automatic activation (aFRR-Platform, PICASSO) implements an implicit imbalance netting process.
Hence, in case the geographical region of the IN-Platform is part of the geographical region of the aFRR-Platform, a separate algorithm for the IN-Platform will no longer be necessary.
The frequency containment reserve (FCR) is not considered as it is out of scope of the said Commission Regulation (EU) 2017/2195 (EBGL).
The available cross-zonal capacity used for imbalance netting process will take into account previous balancing processes.
The respective algorithm will consider available cross-zonal capacities defined between LFC areas and will make sure that the cross-border exchange for imbalance netting from the optimization must not exceed the cross-zonal capacity remaining after previous balancing processes.
In order to respect operational security limitations and handle or avoid congested situations TSOs shall also be able to limit the available cross-zonal capacities.
The algorithm is then required to take these manual limitations into account in the optimisation result.
Bidding zone borders inside an LFC area and the respective cross-zonal capacity limitations shall not be explicitly considered by the optimisation algorithm, for the reasons that the aFRR demand is defined and located per LFC area and it is not possible to calculate the inner-bidding zone cross-border flows in such a case.
Network Code on System Operation (Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation), Article 3(2)(128), Article 146, Recital 10
Network Code on Electricity Balancing (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - NC EB), Article 22
ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016, Electricity Wholesale Markets Volume, October 2017, p. 54
ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Markets in 2015, September 2016
ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015, p. 213
|Last Updated on Saturday, 08 September 2018 10:44|