Standard Product (Electricity Balancing Market)
'Standard product' in the EU internal electricity balancing market means a harmonised balancing product defined by all Transmission System Operators (TSOs) for the exchange of balancing services (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (Electricity Balancing Regulation), Article 2(28)).
The same definition in this regard is included in Article 2(31) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast).
Requirements for standard products are stipulated in Article 25 of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - see box.
The first step in the harmonising the EU framework for electricity balancing - the ACER’s Framework Guidelines on Electricity Balancing of 18 September 2012 - introduced a requirement for a standardisation of balancing products.
To this end, the ENTSO-E draft of the Electricity Balancing Network Code (NC EB) listed the standard characteristics as a minimum set of features which define balancing capacity and balancing energy products.
ACER recognised, however, that TSOs may need some transition time to move from the use of non-standardised products (specific products) to fully standardised ones (ACER's Recommendation No 03/2015 of 20 July 2015 on the Network Code on Electricity Balancing, p. 6).
According to Article 25(4) of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 the list of standard products for balancing energy and balancing capacity may set out at least the following characteristics of a standard product bid:
(a) preparation period;
(b) ramping period;
(c) full activation time;
(d) minimum and maximum quantity;
(e) deactivation period;
(f) minimum and maximum duration of delivery period;
(g) validity period;
(h) mode of activation.
According to Article 25(5) of the said Commission Regulation (EU) 2017/2195 of 23 November 2017 the list of standard products for balancing energy and balancing capacity shall set out at least the following variable characteristics of a standard product to be determined by the Balancing Service Providers (BSPs) during the prequalification or when submitting the standard product bid:
(a) price of the bid;
(d) minimum duration between the end of deactivation period and the following activation.
The ENTSO-E Supporting Document for the Network Code on Electricity Balancing of 6 August 2014 contains the following explanations in that regard:
"All TSOs will prepare a common proposal for Standard Products for Balancing Capacity and Standard Products for Balancing Energy which includes specifications of their characteristics that may be more precise than the minimum laid out in NC EB.
The NC EB also outlines a process to define, review and update the list of Standard Products, which includes a public consultation with stakeholders. The process foresees that this proposal from all TSOs is submitted to all National Regulatory Authorities (NRAs) and to ACER no later than one year after the NC EB comes into force.
The standard characteristics are the minimum set of product attributes that would allow for its exchange through a Common Merit Order List. Standard characteristics should seek to minimise the number of Common Merit Order Lists so as to maximise the liquidity of Balancing Markets. In other words, it could be somehow possible to exchange, through a Common Merit Order List, products that are not fully harmonised provided these products are able to meet the minimum standard characteristics."
The following standard characteristics or additional characteristics were considered as a minimum set of characteristics to define the standard product:
(a) minimum and maximum quantity – minimum and/or maximum quantity of single bids expressed in MW;
(b) full activation time – the sum of preparation period and ramping period, whereas:
- preparation period is time required prior to start of delivery the first MW, and
- ramping period is time when the bid starts the physical activation, delivers the first MW and approaches the requested power of the TSO; expressed in seconds if the bid is not divisible and expressed in MW/s if the bid is divisible;
(c) full delivery period – the sum of ramping period; minimum and maximum duration of delivery period; and deactivation period, where:
- ramping period (as described above)
- minimum and maximum duration of delivery period – the time during which the BSP delivers the full requested power to the system,
- deactivation period – the time from the start of physical deactivation of the unit until the full instruction MW has been delivered; expressed in seconds if the bid is not divisible and MW/s if the bid is divisible;
(d) divisibility – the minimum divisible unit of balancing energy expressed in MW for the divisibility of volume and expressed in seconds for the divisibility of delivery period;
(e) validity period – the period defined by a beginning time (hh:mm) and an ending time (hh:mm), when the bid could be activated, the validity period is at least the full delivery period;
Electricity Balancing Regulation (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - NC EB), Article 2(28), Article 25
(f) price of the bid – the price of balancing energy in €/MWh;
(g) mode of activation – manual or automatic;
(h) the minimal duration between the end of deactivation period and the following activation, which allows a time to recover the capacity to provide the service once again.
The initial pricing method for standard products will be based on marginal pricing (pay-as-cleared), unless detailed analysis demonstrates that a different pricing method is more efficient for EU-wide implementation.
Article 27 of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing provides for the specific rules for the conversion of integrated scheduling process bids in a central dispatching model into standard products.
According to the said provision each TSO applying a central dispatching model shall convert as far as possible the integrated scheduling process bids into standard products taking into account operational security.
The rules for the aforementioned converting the integrated scheduling process bids into standard products must:
(a) be fair, transparent and non-discriminatory;
(b) not create barriers for the exchange of balancing services;
(c) ensure the financial neutrality of TSOs.
According to Article 3 of the ACER Decision No 12/2020 of 17 June 2020 (COCZCA) standard balancing capacity products and bids for the purposes of applying co-optimised cross-zonal capacity allocation will be as follows:
(1) The co-optimised allocation process shall be integrated within the Single Day-Ahead Coupling (SDAC) algorithm and shall allocate cross-zonal capacities for the exchange of standard balancing capacity products or sharing of reserves following the objective in Article 9(2).
(2) The contracting period of standard balancing capacity bids exchanged with the application of co-optimisation shall be equal to or a multiple of the day-ahead market time unit and shall be less or equal to the total amount of day-ahead market time units of the concerned day.
(3) The validity period of bids from standard balancing capacity products used for co-optimised cross-zonal allocation shall be equal to the day-ahead market time unit.
(4) The settlement of the standard balancing capacity bids with the balancing service providers for where co-optimised cross-zonal allocation is applied shall be based on cross-border marginal pricing (pay-as-cleared).
(5) Cross-zonal capacities for the exchange of standard balancing capacity products or sharing of reserves from co-optimised cross-zonal allocation shall be exclusively provided to the respective platform, pursuant to Articles 19 to 21 of the Electricity Balancing Regulation, of the product they were allocated for.
(6) The process of releasing allocated cross-zonal capacity for the exchange of balancing capacity or sharing of reserves in accordance with Article 10(2) shall be coordinated between the balancing energy platforms pursuant to Articles 19 to 21 of the Electricity Balancing Regulation.