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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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:
(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.

 

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.

 

 

 

 

 
chronicle   Regulatory chronicle

 

 

 

 

11 October 2021

 

ACER Public Consultation on the amendment of the EU electricity balancing pricing methodology, PC_2021_E_09

 

15 July 2020

 

Decision No 17/2020 of the European Union Agency for the Cooperation of Energy Regulators of 15 July 2020 on the common settlement rules applicable to all intended exchanges of energy

 
Annexes to the Decision 17/2020

 

24 January 2020


ACER Decision 01/2020 on the methodology to determine prices for the balancing energy that results from the activation of balancing energy bids


Annexes to the Decision 01/2020

 

18 December 2018

 

All TSOs’ proposal for common settlement rules applicable to all intended exchanges of energy as a result of the reserve replacement process, frequency restoration process with manual and automatic activation and the imbalance netting process pursuant to Article 50(1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing

 

Explanatory document to all TSOs’ proposal for a methodology for the TSO-TSO settlement rules for the intended exchange of energy in accordance with Article 50(1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing

 

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) of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing

 

Explanatory document to 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) of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing

 

12 September 2018 

 

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)

 

 

  

 

IMG 0744    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

 

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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