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Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (Text with EEA relevance. )

Type Regulation

Publication 2017-11-28

Last updated 2022-06-19

State In force

Department European Commission, ENER

Source EUR-Lex

articles 65

Reform history JSON API

(a) the calculation of an imbalance adjustment pursuant to Article 49 and the calculation of a position, an imbalance and an allocated volume following one of the approaches pursuant to Article 54(3);

(b) the main components used for the calculation of the imbalance price for all imbalances pursuant to Article 55 including, where appropriate, the definition of the value of avoided activation of balancing energy from frequency restoration reserves or replacement reserves;

(c) the use of single imbalance pricing for all imbalances pursuant to Article 55, which defines a single price for positive imbalances and negative imbalances for each imbalance price area within an imbalance settlement period; and

(d) the definition of conditions and methodology for applying dual imbalance pricing for all imbalances pursuant to Article 55, which defines one price for positive imbalances and one price for negative imbalances for each imbalance price area within an imbalance settlement period, encompassing:
(i) conditions on when a TSO may propose to its relevant regulatory authority in accordance with Article 37 of Directive 2009/72/EC the application of dual pricing and which justification must be provided;
(ii) the methodology for applying dual pricing.

The proposal pursuant to paragraph 2 may distinguish between self-dispatching models and central dispatching models.

The proposal pursuant to paragraph 2 shall provide an implementation date no later than eighteen months after approval by all relevant regulatory authorities in accordance with Article 5(2).

Article 53

Imbalance settlement period

By three years after the entry into force of this Regulation, all TSOs shall apply the imbalance settlement period of 15 minutes in all scheduling areas while ensuring that all boundaries of market time unit shall coincide with boundaries of the imbalance settlement period.

The TSOs of a synchronous area may jointly request an exemption from the requirement laid down in paragraph 1.

Where the relevant regulatory authorities of a synchronous area grant an exemption from the requirement laid down in paragraph 1 upon a joint request of the TSOs in the concerned synchronous area or at their own initiative, they shall perform, in cooperation with the Agency and at least every three years, a cost-benefit analysis concerning the harmonisation of the imbalance settlement period within and between synchronous areas.

Article 54

Imbalance calculation

Each TSO shall calculate within its scheduling area or scheduling areas when appropriate the final position, the allocated volume, the imbalance adjustment and the imbalance:

(a) for each balance responsible party;

(b) for each imbalance settlement period;

The imbalance area shall be equal to the scheduling area, except in case of a central dispatching model where imbalance area may constitute a part of scheduling area.

Until the implementation of the proposal pursuant to Article 52(2), each TSO shall calculate the final position of a balance responsible party using one of the following approaches:

(a) balance responsible party has one single final position equal to the sum of its external commercial trade schedules and internal commercial trade schedules;

(b) balance responsible party has two final positions: the first is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from generation, and the second is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from consumption;

(c) in a central dispatching model, a balance responsible party can have several final positions per imbalance area equal to generation schedules of power generating facilities or consumption schedules of demand facilities.

Each TSO shall set up the rules for:

(a) the calculation of the final position;

(b) the determination of the allocated volume;

(d) the calculation of the imbalance;

(e) claiming the recalculation of the imbalance by a balance responsible party.

Allocated volume shall not be calculated for a balance responsible party which does not cover injections or withdrawals.

An imbalance shall indicate the size and the direction of the settlement transaction between the balance responsible party and the TSO; an imbalance can have alternatively:

(a) a negative sign, indicating a balance responsible party's shortage;

(b) a positive sign, indicating a balance responsible party's surplus.

Article 55

Imbalance price

Each TSO shall set up rules to calculate the imbalance price, which can be positive, zero or negative, as defined in Table 2:

Table 2

Payment for imbalance

	Imbalance price positive	Imbalance price negative
Positive imbalance	Payment from TSO to BRP	Payment from BRP to TSO
Negative imbalance	Payment from BRP to TSO	Payment from TSO to BRP

The rules pursuant to paragraph 1 shall include a definition of the value of avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

Each TSO shall determine the imbalance price for:

(a) each imbalance settlement period;

(b) its imbalance price areas;

The imbalance price for negative imbalance shall not be less than, alternatively:

(a) the weighted average price for positive activated balancing energy from frequency restoration reserves and replacement reserves;

(b) in the event that no activation of balancing energy in either direction has occurred during the imbalance settlement period, the value of the avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

The imbalance price for positive imbalance shall not be greater than, alternatively:

(a) the weighted average price for negative activated balancing energy from frequency restoration reserves and replacement reserves;

(b) in the event that no activation of balancing energy in either direction has occurred during the imbalance settlement period, the value of the avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

In the event that both positive and negative balancing energy from frequency restoration reserves or replacement reserves have been activated during the same imbalance settlement period, the imbalance settlement price shall be determined for positive imbalance and negative imbalance based on at least one of the principles pursuant to paragraphs 4 and 5.

CHAPTER 5 Settlement of balancing capacity

Article 56

Procurement within a scheduling area

Each TSO of a scheduling area using balancing capacity bids shall establish rules for the settlement of at least frequency restoration reserves and replacement reserves pursuant to the requirements set out in Article 32.

Each TSO of a scheduling area using balancing capacity bids shall settle at least all procured frequency restoration reserves and replacement reserves pursuant to the requirements set out in Article 32.

Article 57

Procurement outside a scheduling area

All TSOs exchanging balancing capacity shall establish rules for the settlement of procured balancing capacity pursuant to Article 33 and Article 35.

All TSOs exchanging balancing capacity shall jointly settle procured balancing capacity using the TSO-TSO settlement function pursuant to Article 33. TSOs exchanging balancing capacity based on a TSO-BSP model shall settle procured balancing capacity pursuant to Article 35.

All TSOs exchanging balancing capacity shall establish rules for the settlement of allocation of cross-zonal capacity pursuant to Chapter 2 of Title IV.

All TSOs exchanging balancing capacity shall settle the allocated cross-zonal capacity pursuant to Chapter 2 of Title IV.

TITLE VI ALGORITHM

Article 58

Balancing algorithms

In the proposals pursuant to Articles 19, 20 and 21, all TSOs shall develop algorithms to be operated by the activation optimisation functions for the activation of balancing energy bids. Those algorithms shall:

(a) respect the activation method of balancing energy bids pursuant to Article 29;

(b) respect the pricing method for balancing energy pursuant to Article 30;

(c) take into account the process descriptions for imbalance netting and cross-border activation pursuant to Part IV Title III of Regulation (EU) 2017/1485.

In the proposal pursuant to Article 22, all TSOs shall develop an algorithm to be operated by the imbalance netting process function. This algorithm shall minimise the counter activation of balancing resources by performing the imbalance netting process pursuant to Part IV of Regulation (EU) 2017/1485.

In the proposal pursuant to Article 33, two or more TSOs exchanging balancing capacity shall develop algorithms to be operated by the capacity procurement optimisation functions for the procurement of balancing capacity bids. Those algorithms shall:

(a) minimise the overall procurement costs of all jointly procured balancing capacity;

(b) if applicable, take into account the availability of cross-zonal capacity including possible costs for its provision.

All algorithms developed in accordance with this Article shall:

(a) respect operational security constraints;

(b) take into account technical and network constraints;

TITLE VII REPORTING

Article 59

European report on integration of balancing markets

ENTSO-E shall publish a European report focusing on monitoring, describing and analysing the implementation of this Regulation, as well as reporting on the progress made concerning the integration of balancing markets in Europe, respecting the confidentiality of information in accordance with Article 11.

The format of the report shall vary as follow:

(a) two years after entry into force of this Regulation and subsequently every second year a detailed report shall be published;

(b) three years after entry into force of this Regulation and subsequently every second year a shorter version of the report shall be published to review the progress made and update the performance indicators.

The report pursuant to paragraph 2(a) shall:

(a) describe and analyse the harmonisation and integration process as well as the progress made in terms of harmonisation and integration of balancing markets through the application of this Regulation;

(b) describe the status of implementation projects pursuant to this Regulation;

(c) assess the compatibility between the implementation projects and investigate any possible developments that pose a risk for future integration;

(d) analyse the development of the exchanges of balancing capacity and the sharing of reserves and describe possible barriers, prerequisites and actions to further enhance the exchange of balancing capacity and the sharing of reserves;

(e) describe the existing and analyse the potential exchanges of balancing services;

(f) analyse the suitability of standard products with respect to the latest development and evolution of different balancing resources and propose possible improvements of standard products;

(g) assess the need for further harmonisation of standard products and possible effects of non-harmonisation on integration of balancing markets;

(h) assess the existence and justifications for specific products used by TSOs and their effect on the integration of balancing markets;

(i) assess the progress of harmonisation of the main features of imbalance settlement as well as the consequences and possible distortions due to non-harmonisation;

(j) report the results of the cost-benefit analyses pursuant to Article 61.

ENTSO-E shall set up performance indicators for balancing markets that will be used in the reports. These performance indicators shall reflect:

(a) the availability of balancing energy bids, including the bids from balancing capacity;

(b) the monetary gains and savings due to imbalance netting, exchange of balancing services and sharing of reserves;

(d) the total cost of balancing;

(e) the economic efficiency and reliability of the balancing markets;

(f) the possible inefficiencies and distortions on balancing markets;

(g) the efficiency losses due to specific products;

(h) the volume and price of balancing energy used for balancing purposes, both available and activated, from standard products and from specific products;

(i) the imbalance prices and the system imbalances;

(j) the evolution of balancing service prices of the previous years;

(k) the comparison of expected and realised costs and benefits from all allocations of cross-zonal capacity for balancing purposes.

Before the submission of the final report, ENTSO-E shall prepare a proposal for a draft report. This proposal shall define the structure of the report, the content and performance indicators that will be used in the report. The proposal shall be delivered to the Agency which shall be entitled to require amendments within two months after the submission of the proposal.

The report pursuant to paragraph 2(a) shall also contain an executive summary in English of each TSO report on balancing pursuant to Article 60.

The reports shall provide disaggregated information and indicators for each scheduling area, each bidding zone border, or each LFC block.

ENTSO-E shall publish the reports on internet and submit it to the Agency no later than six months after the end of the year it refers to.

After the deadlines by which all TSOs shall use the European platforms pursuant to Articles 19(5), 20(6), 21(6) and 22(5), all TSOs shall review the content and conditions of publication of the reports. Based on the outcome of that review, ENTSO-E shall develop a proposal for a new structure and timing for the publication of the reports and submit it to the Agency. The Agency shall be entitled to require amendments within three months after the submission of the proposal.

Article 60

TSO report on balancing

At least once every two years, each TSO shall publish a report on balancing covering the previous two calendar years, respecting the confidentiality of information in accordance with Article 11.

The report on balancing shall:

(a) include information concerning the volumes of available, procured and used specific products, as well as justification of specific products subject to conditions pursuant to Article 26;

(b) provide the summary analysis of the dimensioning of reserve capacity including the justification and explanation for the calculated reserve capacity requirements;

(c) provide the summary analysis of the optimal provision of reserve capacity including the justification of the volume of balancing capacity;

(d) analyse the costs and benefits, and the possible inefficiencies and distortions of having specific products in terms of competition and market fragmentation, participation of demand response and renewable energy sources, integration of balancing markets and side-effects on other electricity markets;

(e) analyse the opportunities for the exchange of balancing capacity and sharing of reserves;

(f) provide an explanation and a justification for the procurement of balancing capacity without the exchange of balancing capacity or sharing of reserves;

(g) analyse the efficiency of the activation optimisation functions for the balancing energy from frequency restoration reserves and, if applicable, for the balancing energy from replacement reserves.

The report on balancing shall either be in English or at least contain an executive summary in English.

Based on previously published reports, the relevant regulatory authority in accordance with Article 37 of Directive 2009/72/EC shall be entitled to require changes to the structure and content of the next TSO report on balancing.

TITLE VIII COST-BENEFIT ANALYSIS

Article 61

Cost-benefit analysis

When TSOs are required to carry out a cost-benefit analysis pursuant to this Regulation, they shall establish the criteria and methodology for the cost-benefit analysis and submit them to the relevant regulatory authorities in accordance with Article 37 of Directive 2009/72/EC by six months before the start of the cost-benefit analysis. The relevant regulatory authorities shall be entitled to jointly require amendments to the criteria and methodology.

The cost-benefit analysis shall at least take into account:

(a) the technical feasibility;

(b) the economic efficiency;

(d) the costs and benefits of implementation;

(e) the impact on European and national balancing costs;

(f) the potential impact on European electricity market prices;

(g) the ability of TSOs and balancing responsible parties to fulfil their obligations;

(h) the impact on market parties in terms of additional technical or IT requirements assessed in cooperation with the affected stakeholders.

All concerned TSOs shall provide the results of the cost-benefit analysis to all relevant regulatory authorities, together with a justified proposal on how to address possible issues identified by the cost-benefit analysis.

TITLE IX DEROGATIONS AND MONITORING

Article 62

Derogations

A regulatory authority in accordance with Article 37 of Directive 2009/72/EC may, at the request of a TSO or at its own initiative, grant the relevant TSOs a derogation from one or more provisions of this Regulation in accordance with paragraphs 2 to 12.

A TSO may request a derogation from the following requirements:

(a) the deadlines by which a TSO shall use the European platforms pursuant to Articles 19(5), 20(6), 21(6) and 22(5);

(b) the definition of the integrated scheduling process gate closure time in a central dispatching model pursuant to Article 24(5) and the possibility to change the integrated scheduling process bids pursuant to Article 24(6);

(c) the maximum volume of cross-zonal capacity allocated on a market-based process pursuant to Article 41(2) or a process based an economic efficiency analysis pursuant to Article 42(2);

(d) the harmonisation of the imbalance settlement period in Article 53(1);

(e) the implementation of the requirements pursuant to Articles 45, 46, 47, 48, 49, 50, 51, 54, 55, 56 and 57.

The derogation process shall be transparent, non-discriminatory, non-biased, well documented and based on a reasoned request.

TSOs shall file a written request for derogation to the relevant regulatory authority at the latest six months prior to the day of application of the provisions from which the derogation is requested.

The request for derogation shall include the following information:

(a) the provisions from which a derogation is requested;

(b) the requested derogation period;

(c) a detailed plan and timeline specifying how to address and ensure the implementation of the concerned provisions of this Regulation after expiration of the derogation period;

(d) an assessment of the consequences of requested derogation on adjacent markets;

(e) an assessment of the possible risks for the integration of balancing markets across Europe caused by the requested derogation.

The relevant regulatory authority shall adopt a decision concerning any request for derogation within six months from the day after it receives the request. That time limit may be extended by three months before its expiry where the relevant regulatory authority requires further information from the TSO requesting the derogation. The additional period shall begin when the complete information has been received.

The TSO requesting the derogation shall submit any additional information requested by the relevant regulatory authority within two months of such request. If the TSO does not supply the requested information within that time limit, the request for a derogation shall be deemed withdrawn unless, before its expiry, alternatively:

(a) the relevant regulatory authority decides to provide an extension;

(b) the TSO informs the relevant regulatory authority by means of a reasoned submission that the request for a derogation is complete.

When assessing the request for derogation or before granting a derogation at its own initiative, the relevant regulatory authority shall consider the following aspects:

(a) the difficulties related to the implementation of the concerned provision or provisions;

(b) the risks and the implications of the concerned provision or provisions, in terms of operational security;

(d) the impacts of non-implementation of the concerned provision or provisions, in terms of non-discrimination and competition with other European market participants, in particular as regards demand response and renewable energy sources;

(e) the impacts on overall economic efficiency and smart grid infrastructure;

(f) the impacts on other scheduling areas and overall consequences on the European market integration process.

The relevant regulatory authority shall issue a reasoned decision concerning a request for a derogation or a derogation granted at its own initiative. Where the relevant regulatory authority grants a derogation, it shall specify its duration. The derogation may be granted only once and for a maximum period of two years, except for the derogations in paragraphs 2(c) and 2(d) which may be granted until 1 January 2025.

10.

The relevant regulatory authority shall notify its decision to the TSO, the Agency and the European Commission. The decision shall also be published on its website.

11.

The relevant regulatory authorities shall maintain a register of all derogations they have granted or refused and shall provide the Agency with an updated and consolidated register at least once every six months, a copy of which shall be given to ENTSO-E.

12.

The register shall contain, in particular:

(a) the provisions from which the derogation is granted or refused;

(b) the content of the derogation;

(d) the consequences resulting from granting the derogation.

Article 63

Monitoring

ENTSO-E shall monitor the implementation of this Regulation in accordance with Article 8(8) of Regulation (EC) No 714/2009. Monitoring of the implementation of this Regulation by ENTSO-E shall cover at least the following matters:

(a) preparation of the European report on integration of balancing market pursuant to Article 59;

(b) preparation of a report on monitoring of the implementation of this Regulation including the effect on the harmonisation of applicable rules aimed at facilitating market integration.

ENTSO-E shall submit a monitoring plan on the reports to be prepared and any updates, to the Agency for an opinion by six months after entry into force of this Regulation.

The Agency, in cooperation with ENTSO-E, shall draw up by 12 months after the entry into force of this Regulation a list of the relevant information to be communicated by ENTSO-E to the Agency in accordance with Article 8(9) and 9(1) of Regulation (EC) No 714/2009. The list of relevant information may be subject to updates. ENTSO-E shall maintain a comprehensive, standardised format, digital data archive of the information required by the Agency.

All TSOs shall submit to ENTSO-E the information required to perform the tasks in accordance with paragraphs 1 and 3.

Market participants and other relevant organisations for the integration of electricity balancing markets shall, at the joint request of the Agency and ENTSO-E, submit to ENTSO-E the information required for monitoring in accordance with paragraphs 1 and 3, except for information already obtained by the relevant regulatory authorities in accordance with Article 37 of Directive 2009/72/EC, the Agency or ENTSO-E in the context of their respective implementation monitoring tasks.

TITLE X TRANSITIONAL AND FINAL PROVISIONS

Article 64

Transitional provisions for Ireland and Northern Ireland

Except for the participation in the development of terms and conditions or methodologies, for which the respective deadlines shall apply, the requirements of this Regulation shall apply in Ireland and Northern Ireland from 31 December 2019.

Article 65

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

For Articles 14, 16, 17, 28, 32, 34 to 36, 44 to 49, and 54 to 57, this Regulation shall apply from one year after entry into force of this Regulation.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

[^E0001]: Commission Regulation (EU) No 543/2013 of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 of the European Parliament and of the Council (OJ L 163, 15.6.2013, p. 1).

[^E0002]: Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L 197, 25.7.2015, p. 24).

[^E0003]: Commission Regulation (EU) 2016/631 of 14 April 2016 establishing a network code on requirements for grid connection of generators (OJ L 112, 27.4.2016, p. 1).

[^E0004]: Commission Regulation (EU) 2016/1388 of 17 August 2016 establishing a network code on demand connection (OJ L 223, 18.8.2016, p. 10).

[^E0005]: Commission Regulation (EU) 2016/1447 of 26 August 2016 establishing a network code on requirements for grid connection of high voltage direct current systems and direct current-connected power park modules (OJ L 241, 8.9.2016, p. 1).

[^E0006]: Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (OJ L 259, 27.9.2016, p. 42).

[^E0007]: Commission Regulation (EU) 2017/2196 of 24 November 2017 establishing a network code on electricity emergency and restoration (see page 54 of this Official Journal).

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