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Document 02017R2195-20220619
Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (Text with EEA relevance)Text with EEA relevance
Consolidated text: Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (Text with EEA relevance)Text with EEA relevance
Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (Text with EEA relevance)Text with EEA relevance
02017R2195 — EN — 19.06.2022 — 002.001
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COMMISSION REGULATION (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (OJ L 312 28.11.2017, p. 6) |
Amended by:
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Official Journal |
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No |
page |
date |
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COMMISSION IMPLEMENTING REGULATION (EU) 2021/280 of 22 February 2021 |
L 62 |
24 |
23.2.2021 |
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COMMISSION IMPLEMENTING REGULATION (EU) 2022/828 of 25 May 2022 |
L 147 |
27 |
30.5.2022 |
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COMMISSION REGULATION (EU) 2017/2195
of 23 November 2017
establishing a guideline on electricity balancing
(Text with EEA relevance)
TITLE I
GENERAL PROVISIONS
Article 1
Subject matter and scope
Article 2
Definitions
For the purposes of this Regulation, the definitions in Article 2 of Directive 2009/72/EC, Article 2 of Regulation (EC) No 714/2009, Article 2 of Commission Regulation (EU) No 543/2013 ( 1 ), Article 2 of Commission Regulation (EU) 2015/1222 ( 2 ), Article 2 of Commission Regulation (EU) 2016/631 ( 3 ), Article 2 of Commission Regulation (EU) 2016/1388 ( 4 ), Article 2 of Commission Regulation (EU) 2016/1447 ( 5 ), Article 2 of Commission Regulation (EU) 2016/1719 ( 6 ), Article 3 of Commission Regulation (EU) 2017/1485, and Article 3 of Commission Regulation (EU) 2017/2196 ( 7 ) shall apply.
The following definitions shall also apply:
‘balancing’ means all actions and processes, on all timelines, through which TSOs ensure, in a continuous way, the maintenance of system frequency within a predefined stability range as set out in Article 127 of Regulation (EU) 2017/1485, and compliance with the amount of reserves needed with respect to the required quality, as set out in Part IV Title V, Title VI and Title VII of Regulation (EU) 2017/1485;
‘balancing market’ means the entirety of institutional, commercial and operational arrangements that establish market-based management of balancing;
‘balancing services’ means balancing energy or balancing capacity, or both;
‘balancing energy’ means energy used by TSOs to perform balancing and provided by a balancing service provider;
‘balancing capacity’ means a volume of reserve capacity that a balancing service provider has agreed to hold and in respect to which the balancing service provider has agreed to submit bids for a corresponding volume of balancing energy to the TSO for the duration of the contract;
‘balancing service provider’ means a market participant with reserve-providing units or reserve-providing groups able to provide balancing services to TSOs;
‘balance responsible party’ means a market participant or its chosen representative responsible for its imbalances;
‘imbalance’ means an energy volume calculated for a balance responsible party and representing the difference between the allocated volume attributed to that balance responsible party and the final position of that balance responsible party, including any imbalance adjustment applied to that balance responsible party, within a given imbalance settlement period;
‘imbalance settlement’ means a financial settlement mechanism for charging or paying balance responsible parties for their imbalances;
‘imbalance settlement period’ means the time unit for which balance responsible parties' imbalance is calculated;
‘imbalance area’ means the area in which an imbalance is calculated;
‘imbalance price’ means the price, be it positive, zero or negative, in each imbalance settlement period for an imbalance in each direction;
‘imbalance price area’ means the area for the calculation of an imbalance price;
‘imbalance adjustment’ means an energy volume representing the balancing energy from a balancing service provider and applied by the connecting TSO for an imbalance settlement period to the concerned balance responsible parties, used for the calculation of the imbalance of these balance responsible parties;
‘allocated volume’ means an energy volume physically injected or withdrawn from the system and attributed to a balance responsible party, for the calculation of the imbalance of that balance responsible party;
‘position’ means the declared energy volume of a balance responsible party used for the calculation of its imbalance;
‘self-dispatching model’ means a scheduling and dispatching model where the generation schedules and consumption schedules as well as dispatching of power generating facilities and demand facilities are determined by the scheduling agents of those facilities;
‘central dispatching model’ means a scheduling and dispatching model where the generation schedules and consumption schedules as well as dispatching of power generating facilities and demand facilities, in reference to dispatchable facilities, are determined by a TSO within the integrated scheduling process;
‘integrated scheduling process’ means an iterative process that uses at least integrated scheduling process bids that contain commercial data, complex technical data of individual power generating facilities or demand facilities and explicitly includes the start-up characteristics, the latest control area adequacy analysis and the operational security limits as an input to the process;
‘integrated scheduling process gate closure time’ means the point in time when the submission or the update of integrated scheduling process bids is no longer permitted for the given iterations of the integrated scheduling process;
‘TSO-TSO model’ means a model for the exchange of balancing services where the balancing service provider provides balancing services to its connecting TSO, which then provides these balancing services to the requesting TSO;
‘connecting TSO’ means the TSO that operates the scheduling area in which balancing service providers and balance responsible parties shall be compliant with the terms and conditions related to balancing;
‘exchange of balancing services’ means either or both exchange of balancing energy and exchange of balancing capacity;
‘exchange of balancing energy’ means the activation of balancing energy bids for the delivery of balancing energy to a TSO in a different scheduling area than the one in which the activated balancing service provider is connected;
‘exchange of balancing capacity’ means the provision of balancing capacity to a TSO in a different scheduling area than the one in which the procured balancing service provider is connected;
‘transfer of balancing capacity’ means a transfer of balancing capacity from the initially contracted balancing service provider to another balancing service provider;
‘balancing energy gate closure time’ means the point in time when submission or update of a balancing energy bid for a standard product on a common merit order list is no longer permitted;
‘standard product’ means a harmonised balancing product defined by all TSOs for the exchange of balancing services;
‘preparation period’ means the period between the request by the connecting TSO in case of TSO-TSO model or by the contracting TSO in case of TSO-BSP model and the start of the ramping period;
‘full activation time’ means the period between the activation request by the connecting TSO in case of TSO-TSO model or by the contracting TSO in case of TSO-BSP model and the corresponding full delivery of the concerned product;
‘deactivation period’ means the period for ramping from full delivery to a set point, or from full withdrawal back to a set point;
‘delivery period’ means the period of delivery during which the balancing service provider delivers the full requested change of power in-feed to, or the full requested change of withdrawals from the system;
‘validity period’ means the period when the balancing energy bid offered by the balancing service provider can be activated, where all the characteristics of the product are respected. The validity period is defined by a start time and an end time;
‘mode of activation’ means the mode of activation of balancing energy bids, manual or automatic, depending on whether balancing energy is triggered manually by an operator or automatically in a closed-loop manner;
‘divisibility’ means the possibility for a TSO to use only part of the balancing energy bids or balancing capacity bids offered by the balancing service provider, either in terms of power activation or time duration;
‘specific product’ means a product different from a standard product;
‘common merit order list’ means a list of balancing energy bids sorted in order of their bid prices, used for the activation of those bids;
‘TSO energy bid submission gate closure time’ means the latest point in time when a connecting TSO can forward the balancing energy bids received from a balancing service provider to the activation optimisation function;
‘activation optimisation function’ means the function of operating the algorithm applied to optimise the activation of balancing energy bids;
‘imbalance netting process function’ means the role to operate the algorithm applied for operating the imbalance netting process;
‘TSO-TSO settlement function’ means the function of performing the settlement of cooperation processes between the TSOs;
‘capacity procurement optimisation function’ means the function of operating the algorithm applied for the optimisation of the procurement of balancing capacity for TSOs exchanging balancing capacity.
‘TSO-BSP model’ means a model for the exchange of balancing services where the balancing service provider provides balancing services directly to the contracting TSO, which then provides these balancing services to the requesting TSO;
‘contracting TSO’ means the TSO that has contractual arrangements for balancing services with a balancing service provider in another scheduling area;
‘requesting TSO’ means the TSO that requests the delivery of balancing energy.
Article 3
Objectives and regulatory aspects
This Regulation aims at:
fostering effective competition, non-discrimination and transparency in balancing markets;
enhancing efficiency of balancing as well as efficiency of European and national balancing markets;
integrating balancing markets and promoting the possibilities for exchanges of balancing services while contributing to operational security;
contributing to the efficient long-term operation and development of the electricity transmission system and electricity sector in the Union while facilitating the efficient and consistent functioning of day-ahead, intraday and balancing markets;
ensuring that the procurement of balancing services is fair, objective, transparent and market-based, avoids undue barriers to entry for new entrants, fosters the liquidity of balancing markets while preventing undue distortions within the internal market in electricity;
facilitating the participation of demand response including aggregation facilities and energy storage while ensuring they compete with other balancing services at a level playing field and, where necessary, act independently when serving a single demand facility;
facilitating the participation of renewable energy sources and support the achievement of the European Union target for the penetration of renewable generation.
When applying this Regulation, Member States, relevant regulatory authorities, and system operators shall:
apply the principles of proportionality and non-discrimination;
ensure transparency;
apply the principle of optimisation between the highest overall efficiency and lowest total costs for all parties involved;
ensure that TSOs make use of market-based mechanisms, as far as possible, in order to ensure network security and stability;
ensure that the development of the forward, day-ahead and intraday markets is not compromised;
respect the responsibility assigned to the relevant TSO in order to ensure system security, including as required by national legislation;
consult with relevant DSOs and take account of potential impacts on their system;
take into consideration agreed European standards and technical specifications.
Article 4
Terms and conditions or methodologies of TSOs
Where TSOs deciding on proposals for terms and conditions or methodologies listed in Article 5(2) are not able to reach an agreement, they shall decide by qualified majority voting. A qualified majority for proposals listed in Article 5(2) shall require the following majority:
TSOs representing at least 55 % of the Member States; and
TSOs representing Member States comprising at least 65 % of the population of the Union.
A blocking minority for decisions on proposals for terms and conditions or methodologies listed in Article 5(2) shall include TSOs representing at least four Member States, failing of which the qualified majority shall be deemed attained.
Where TSOs deciding on proposals for terms and conditions or methodologies listed in Article 5(3) are not able to reach an agreement, and where the regions concerned are composed of more than five Member States, they shall decide by qualified majority voting. A qualified majority for proposals in accordance with Article 5(3) shall require the following majority:
TSOs representing at least 72 % of the Member States concerned; and
TSOs representing Member States comprising at least 65 % of the population of the concerned area.
A blocking minority for decisions on proposals for terms and conditions or methodologies listed in Article 5(3) shall include at least a minimum number of TSOs representing more than 35 % of the population of the participating Member States, plus TSOs representing at least one additional Member State concerned, failing of which the qualified majority shall be deemed attained.
Article 5
Approval of terms and conditions or methodologies of TSOs
The proposals for the following terms and conditions or methodologies and any amendments thereof shall be subject to approval by the Agency:
the frameworks for the establishment of the European platforms pursuant to Articles 20(1), 21(1) and 22(1);
the modifications of the frameworks for the establishment of the European platforms pursuant to Articles 20(5) and 21(5);
the standard products for balancing capacity pursuant to Article 25(2);
the classification methodology for the activation purposes of balancing energy bids pursuant to Article 29(3);
the assessment on the possible increase of the minimum volume of balancing energy bids that shall be forwarded to the European platforms pursuant to Article 29(11);
the 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 (5);
the harmonisation of the methodology for the allocation process of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to Article 38(3);
the methodology for a co-optimised allocation process of cross-zonal capacity pursuant to Article 40(1);
the TSO-TSO settlement rules for the intended exchange of energy pursuant to Article 50(1);
the harmonisation of the main features of imbalance settlement pursuant to Article 52(2).
A Member State may provide an opinion to the concerned regulatory authority on the proposals for the terms and conditions or methodologies listed in the first subparagraph.
The proposals for the following terms and conditions or methodologies and any amendments thereof shall be subject to approval by all regulatory authorities of the concerned region:
the framework, for the geographical area concerning all TSOs performing the reserve replacement process pursuant to Part IV of Regulation (EU) 2017/1485, for the establishment of the European platform for replacement reserves pursuant to Article 19(1);
for the geographical area concerning two or more TSOs exchanging or mutually willing to exchange balancing capacity, the establishment of common and harmonised rules and process for the exchange and procurement of balancing capacity pursuant to Article 33(1);
for the geographical area covering TSOs exchanging balancing capacity, the methodology for calculating the probability of available cross-zonal capacity after intraday cross-zonal gate closure time pursuant to Article 33(6);
the exemption, for the geographical area in which the procurement of balancing capacity has taken place, for not allowing balancing service providers to transfer their obligations to provide balancing capacity pursuant to Article 34(1);
the application of a TSO-BSP model, in a geographical area comprising two or more TSOs, pursuant to Article 35(1);
the cross-zonal capacity calculation methodology for each capacity calculation region pursuant to Article 37(3);
in a geographical area comprising two or more TSOs, the application of the allocation process of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to Article 38(1);
for each capacity calculation region, the methodology for a market-based allocation process of cross-zonal capacity pursuant to Article 41(1);
for each capacity calculation region, the methodology for an allocation process of cross-zonal capacity based on an economic efficiency analysis and the list of each individual allocation of cross-zonal capacity based on an economic efficiency analysis pursuant to Article 42(1) to (5);
for the geographical area comprising all TSOs intentionally exchanging energy within a synchronous area, the TSO-TSO settlement rules for the intended exchange of energy pursuant to Article 50(3);
for the geographical area comprising all asynchronously connected TSOs intentionally exchanging energy, the TSO-TSO settlement rules for the intended exchange of energy pursuant to Article 50(4);
for each synchronous area, the TSO-TSO settlement rules for the unintended exchange of energy pursuant to Article 51(1);
for the geographical area comprising all asynchronously connected TSOs, the TSO-TSO settlement rules for the unintended exchange of energy pursuant to Article 51(2);
the exemption, at synchronous area level, to the harmonisation of the imbalance settlement periods pursuant to Article 53(2);
for the geographical area comprising two or more TSOs exchanging balancing capacity, the principles for balancing algorithms pursuant to Article 58(3).
A Member State may provide an opinion to the concerned regulatory authority on the proposals for the terms and conditions or methodologies listed in the first subparagraph.
The proposals for the following terms and conditions or methodologies and any amendments thereof shall be subject to approval by each regulatory authority of each concerned Member State on a case-by-case basis:
the exemption to publish information on offered prices of balancing energy or balancing capacity bids due to market abuse concerns pursuant to Article 12(4);
where appropriate, the methodology for allocating costs resulting from actions taken by DSOs, pursuant to Article 15(3);
the terms and conditions related to balancing pursuant to Article 18;
the definition and the use of specific products pursuant to Article 26(1);
the limitation on the amount of bids that is forwarded to the European platforms pursuant to Article 29(10);
the exemption to separate procurement of upward and downward balancing capacity pursuant to Article 32(3);
where appropriate, the additional settlement mechanism separate from the imbalance settlement, to settle the procurement costs of balancing capacity, administrative costs and other costs related to balancing with balance responsible parties pursuant to Article 44(3);
the derogations to one or more provisions of this Regulation pursuant to Article 62(2);
the costs relating to the obligations imposed on system operators or assigned third entities in accordance with this Regulation pursuant to Article 8(1).
A Member State may provide an opinion to the concerned regulatory authority on the proposals for the terms and conditions or methodologies listed in the first subparagraph.
Article 6
Amendments to terms and conditions or methodologies of TSOs
Article 7
Publication of terms and conditions or methodologies on the internet
TSOs responsible for establishing the terms and conditions or methodologies in accordance with this Regulation shall publish them on the internet following approval by the Agency or the relevant regulatory authorities or, where no such approval is required, following their establishment, except where such information is considered as confidential in accordance with Article 11.
Article 8
Recovery of costs
Article 9
Stakeholder involvement
The Agency, in close cooperation with ENTSO-E, shall organise stakeholder involvement regarding the balancing market and other aspects of the implementation of this Regulation. Such involvement shall include regular meetings with stakeholders to identify problems and propose improvements related to the integration of the balancing market.
Article 10
Public consultation
Article 11
Confidentiality obligations
Article 12
Publication of information
Each TSO shall publish the following information as soon as it becomes available:
information on the current system balance of its scheduling area or scheduling areas, as soon as possible but no later than 30 minutes after real-time;
information on all balancing energy bids from its scheduling area or scheduling areas, anonymised where necessary, no later than 30 min after the end of the relevant market time unit. The information shall include:
type of product;
validity period;
offered volumes;
offered prices;
information on whether the bid was declared as unavailable;
information on whether the balancing energy bid was converted from a specific product or from an integrated scheduling process no later than 30 min after the end of the relevant market time unit;
information regarding how balancing energy bids from specific products or from integrated scheduling process have been converted into balancing energy bids from standard products no later than 30 min after the end of the relevant market time unit;
aggregated information on balancing energy bids no later than 30 min after the end of the relevant market time unit, which shall include:
total volume of offered balancing energy bids;
total volume of offered balancing energy bids separately per type of reserves;
total volume of offered and activated balancing energy bids separately for standard and specific products;
volume of unavailable bids separately per type of reserves;
information on offered volumes as well as offered prices of procured balancing capacity, anonymised where necessary, no later than one hour after the results of the procurement have been notified to the bidders;
the initial terms and conditions related to balancing referred to in Article 18 at least one month before the application and any amendments to the terms and conditions immediately following approval by the relevant regulatory authority in accordance with Article 37 of Directive 2009/72/EC;
information on the allocation of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to Article 38 at the latest 24 hours after the allocation and no later than 6 hours before the use of the allocated cross-zonal capacity:
date and time when the decision on allocation was made;
period of the allocation;
volumes allocated;
market values used as a basis for the allocation process in accordance with Article 39;
information on the use of allocated cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to Article 38 at the latest one week after the use of allocated cross-zonal capacity:
volume of allocated and used cross-zonal capacity per market time unit;
volume of released cross-zonal capacity for subsequent timeframes per market time unit;
estimated realised costs and benefits of the allocation process;
approved methodologies referred to in Articles 40, 41 and 42 at least one month before the application;
description of the requirements of any algorithm developed and amendments to it referred to in Article 58, at least one month before the application;
common annual report referred to in Article 59.
Article 13
Delegation and assignment of tasks
TITLE II
ELECTRICITY BALANCING MARKET
CHAPTER 1
Functions and responsibilities
Article 14
Role of the TSOs
Article 15
Cooperation with DSOs
Article 16
Role of balancing service providers
Article 17
Role of balance responsible parties
Article 18
Terms and conditions related to balancing
No later than six months after entry into force of this Regulation and for all scheduling areas of a Member State, the TSOs of this Member State shall develop a proposal regarding:
the terms and conditions for balancing service providers;
the terms and conditions for balance responsible parties.
Where a LFC area consists of two or more TSOs, all TSOs of that LFC area may develop a common proposal subject to the approval by the relevant regulatory authorities.
When developing proposals for terms and conditions for balancing service providers and balance responsible parties, each TSO shall:
coordinate with the TSOs and DSOs that may be affected by those terms and conditions;
respect the frameworks for the establishment of European platforms for the exchange of balancing energy and for the imbalance netting process pursuant to Articles 19, 20, 21 and 22;
involve other DSOs and other stakeholders throughout the development of the proposal and take into account their views without prejudice to public consultation pursuant to Article 10.
The terms and conditions for balancing service providers shall:
define reasonable and justified requirements for the provisions of balancing services;
allow the aggregation of demand facilities, energy storage facilities and power generating facilities in a scheduling area to offer balancing services subject to conditions referred to in paragraph 5 (c);
allow demand facility owners, third parties and owners of power generating facilities from conventional and renewable energy sources as well as owners of energy storage units to become balancing service providers;
require that each balancing energy bid from a balancing service provider is assigned to one or more balance responsible parties to enable the calculation of an imbalance adjustment pursuant to Article 49.
The terms and conditions for balancing service providers shall contain:
the rules for the qualification process to become a balancing service provider pursuant to Article 16;
the rules, requirements and timescales for the procurement and transfer of balancing capacity pursuant to Articles 32, 33 and 34;
the rules and conditions for the aggregation of demand facilities, energy storage facilities and power generating facilities in a scheduling area to become a balancing service provider;
the requirements on data and information to be delivered to the connecting TSO and, where relevant, to the reserve connecting DSO during the prequalification process and operation of the balancing market;
the rules and conditions for the assignment of each balancing energy bid from a balancing service provider to one or more balance responsible parties pursuant to paragraph 4 (d);
the requirements on data and information to be delivered to the connecting TSO and, where relevant, to the reserve connecting DSO to evaluate the provisions of balancing services pursuant to Article 154(1), Article 154(8), Article 158(1)(e), Article 158(4)(b), Article 161(1)(f) and Article 161(4)(b) of Regulation (EU) 2017/1485;
the definition of a location for each standard product and each specific product taking into account paragraph 5 (c);
the rules for the determination of the volume of balancing energy to be settled with the balancing service provider pursuant to Article 45;
the rules for the settlement of balancing service providers defined pursuant to Chapters 2 and 5 of Title V;
a maximum period for the finalisation of the settlement of balancing energy with a balancing service provider in accordance with Article 45, for any given imbalance settlement period;
the consequences in case of non-compliance with the terms and conditions applicable to balancing service providers.
The terms and conditions for balance responsible parties shall contain:
the definition of balance responsibility for each connection in a way that avoids any gaps or overlaps in the balance responsibility of different market participants providing services to that connection;
the requirements for becoming a balance responsible party;
the requirement that all balance responsible parties shall be financially responsible for their imbalances, and that the imbalances shall be settled with the connecting TSO;
the requirements on data and information to be delivered to the connecting TSO to calculate the imbalances;
the rules for balance responsible parties to change their schedules prior to and after the intraday energy gate closure time pursuant to paragraphs 3 and 4 of Article 17;
the rules for the settlement of balance responsible parties defined pursuant to Chapter 4 of Title V;
the delineation of an imbalance area pursuant to Article 54(2) and an imbalance price area;
a maximum period for the finalisation of the settlement of imbalances with balance responsible parties for any given imbalance settlement period pursuant to Article 54;
the consequences in case of non-compliance with the terms and conditions applicable to balance responsible parties;
an obligation for balance responsible parties to submit to the connecting TSO any modifications of the position;
the settlement rules pursuant to Articles 52, 53, 54 and 55;
where existing, the provisions for the exclusion of imbalances from the imbalance settlement when they are associated with the introduction of ramping restrictions for the alleviation of deterministic frequency deviations pursuant to Article 137(4) of Regulation (EU) 2017/1485.
Each connecting TSO may include the following elements in the proposal for the terms and conditions for balancing service providers or in the terms and conditions for balance responsible parties:
a requirement for balancing service providers to provide information on unused generation capacity and other balancing resources from balancing service providers, after the day-ahead market gate closure time and after the intraday cross-zonal gate closure time;
where justified, a requirement for balancing service providers to offer the unused generation capacity or other balancing resources through balancing energy bids or integrated scheduling process bids in the balancing markets after day ahead market gate closure time, without prejudice to the possibility of balancing service providers to change their balancing energy bids prior to the balancing energy gate closure time or the integrated scheduling process gate closure time due to trading within intraday market;
where justified, a requirement for balancing service providers to offer the unused generation capacity or other balancing resources through balancing energy bids or integrated scheduling process bids in the balancing markets after intraday cross-zonal gate closure time;
specific requirements with regard to the position of balance responsible parties submitted after the day-ahead market timeframe to ensure that the sum of their internal and external commercial trade schedules equals the sum of the physical generation and consumption schedules, taking into account electrical losses compensation, where relevant;
an exemption to publish information on offered prices of balancing energy or balancing capacity bids due to market abuse concerns pursuant to Article 12(4);
an exemption for specific products defined in Article 26(3)(b) to predetermine the price of the balancing energy bids from a balancing capacity contract pursuant to Article 16(6);
an application for the use of dual pricing for all imbalances based on the conditions established pursuant to Article 52(2)(d)(i) and the methodology for applying dual pricing pursuant to Article 52(2)(d)(ii).
TSOs applying a central dispatching model shall also include the following elements in the terms and conditions related to balancing:
the integrated scheduling process gate closure time pursuant to Article 24(5);
the rules for updating the integrated scheduling process bids after each integrated scheduling process gate closure time pursuant to Article 24(6);
the rules for using integrated scheduling process bids prior to the balancing energy gate closure time pursuant to Article 24(7);
the rules for converting integrated scheduling process bids pursuant to Article 27.
CHAPTER 2
European platforms for the exchange of balancing energy
Article 19
European platform for the exchange of balancing energy from replacement reserves
The proposal in paragraph 1 shall include at least:
the high level design of the European platform;
the roadmap and timelines for the implementation of the European platform;
the definition of the functions required to operate the European platform;
the proposed rules concerning the governance and operation of the European platform, based on the principle of non-discrimination and ensuring equitable treatment of all member TSOs and that no TSO benefits from unjustified economic advantages through the participation in the functions of the European platform;
the proposed designation of the entity or entities that will perform the functions defined in the proposal. Where the TSOs propose to designate more than one entity, the proposal shall demonstrate and ensure:
a coherent allocation of the functions to the entities operating the European platform. The proposal shall take full account of the need to coordinate the different functions allocated to the entities operating the European platform;
that the proposed setup of the European platform and allocation of functions ensures efficient and effective governance, operation and regulatory oversight of the European platform as well as, supports the objectives of this Regulation;
an effective coordination and decision making process to resolve any conflicting positions between entities operating the European platform;
the framework for harmonisation of the terms and conditions related to balancing set up pursuant to Article 18;
the detailed principles for sharing the common costs, including the detailed categorisation of common costs, in accordance with Article 23;
the balancing energy gate closure time for all standard products for replacement reserves in accordance with Article 24;
the definition of standard products for balancing energy from replacement reserves in accordance with Article 25;
the TSO energy bid submission gate closure time in accordance with Article 29( 13);
the common merit order lists to be organised by the common activation optimisation function pursuant to Article 31;
the description of the algorithm for the operation of the activation optimisation function for the balancing energy bids from all standard products for replacement reserves in accordance with Article 58.
By one year after the approval of the proposal for the implementation framework for a European platform for the exchange of balancing energy from replacement reserves, all TSOs performing the reserve replacement process pursuant to Part IV of Regulation (EU) 2017/1485 and that have at least one interconnected neighbouring TSO performing the replacement reserves process shall implement and make operational the European platform for the exchange of balancing energy from replacement reserves. They shall use the European platform to:
submit all balancing energy bids from all standard products for replacement reserves;
exchange all balancing energy bids from all standard products for replacement reserves, except for unavailable bids pursuant to Article 29(14);
strive to fulfil all their needs for balancing energy from replacement reserves.
Article 20
European platform for the exchange of balancing energy from frequency restoration reserves with manual activation
The proposal in paragraph 1 shall include at least:
the high level design of the European platform;
the roadmap and timelines for the implementation of the European platform;
the definition of the functions required to operate the European platform;
the proposed rules concerning the governance and operation of the European platform, based on the principle of non-discrimination and ensuring equitable treatment of all member TSOs and that no TSO benefits from unjustified economic advantages through the participation in the functions of the European platform;
the proposed designation of the entity or entities that will perform the functions defined in the proposal. Where the TSOs propose to designate more than one entity, the proposal shall demonstrate and ensure:
a coherent allocation of the functions to the entities operating the European platform. The proposal shall take full account of the need to coordinate the different functions allocated to the entities operating the European platform;
that the proposed setup of the European platform and allocation of functions ensures efficient and effective governance, operation and regulatory oversight of the European platform as well as, supports the objectives of this Regulation;
an effective coordination and decision making process to resolve any conflicting positions between entities operating the European platform;
the framework for harmonisation of the terms and conditions related to balancing set up pursuant to Article 18;
the detailed principles for sharing the common costs, including the detailed categorisation of common costs, in accordance with Article 23;
the balancing energy gate closure time for all standard products for frequency restoration reserves with manual activation in accordance with Article 24;
the definition of standard products for balancing energy from frequency restoration reserves with manual activation in accordance with Article 25;
the TSO energy bid submission gate closure time in accordance with Article 29( 13);
the common merit order lists to be organised by the common activation optimisation function pursuant to Article 31;
the description of the algorithm for the operation of the activation optimisation function for the balancing energy bids from all standard products for frequency restoration reserves with manual activation in accordance with Article 58.
By thirty months after the approval of the proposal for the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with manual activation, or where all TSOs submit a proposal for modification of the European platform pursuant to paragraph 5, by 12 months after the approval of the proposal for modification of the European platform, all TSOs shall implement and make operational the European platform for the exchange of balancing energy from frequency restoration reserves with manual activation and they shall use the European platform to:
submit all balancing energy bids from all standard products for frequency restoration reserves with manual activation;
exchange all balancing energy bids from all standard products for frequency restoration reserves with manual activation, except for unavailable bids pursuant to Article 29(14);
strive to fulfil all their needs for balancing energy from the frequency restoration reserves with manual activation.
Article 21
European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation
The proposal in paragraph 1 shall include at least:
the high level design of the European platform;
the roadmap and timelines for the implementation of the European platform;
the definition of the functions required to operate the European platform;
the proposed rules concerning the governance and operation of the European platform, based on the principle of non-discrimination and ensuring equitable treatment of all member TSOs and that no TSO benefits from unjustified economic advantages through the participation in the functions of the European platform;
the proposed designation of the entity or entities that will perform the functions defined in the proposal. Where the TSOs propose to designate more than one entity, the proposal shall demonstrate and ensure:
a coherent allocation of the functions to the entities operating the European platform. The proposal shall take full account of the need to coordinate the different functions allocated to the entities operating the European platform;
that the proposed setup of the European platform and allocation of functions ensures efficient and effective governance, operation and regulatory oversight of the European platform as well as supports the objectives of this Regulation;
an effective coordination and decision making process to resolve any conflicting positions between entities operating the European platform;
the framework for harmonisation of the terms and conditions related to balancing set up pursuant to Article 18;
the detailed principles for sharing the common costs, including the detailed categorisation of common costs, in accordance with Article 23;
the balancing energy gate closure time for all standard products for frequency restoration reserves with automatic activation in accordance with Article 24;
the definition of standard products for balancing energy from frequency restoration reserves with automatic activation in accordance with Article 25;
the TSO energy bid submission gate closure time in accordance with Article 29( 13);
the common merit order lists to be organised by the common activation optimisation function pursuant to Article 31;
the description of the algorithm for the operation of the activation optimisation function for the balancing energy bids from all standard products for frequency restoration reserves with automatic activation in accordance with Article 58.
By thirty months from the approval of the proposal for the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation, or where all TSOs submit a proposal for modification of the European platform pursuant to paragraph 5, by 12 months after the approval of the proposal for modification of the European platform, all TSOs performing the automatic frequency restoration process pursuant to Part IV of Regulation (EU) 2017/1485 shall implement and make operational the European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation and they shall use the European platform to:
submit all balancing energy bids from all standard products for frequency restoration reserves with automatic activation;
exchange all balancing energy bids from all standard products for frequency restoration reserves with automatic activation, except for unavailable bids pursuant to Article 29(14);
strive to fulfil all their needs for balancing energy from the frequency restoration reserves with automatic activation.
Article 22
European platform for imbalance netting process
The proposal in paragraph 1 shall include at least:
the high level design of the European platform;
the roadmap and timelines for the implementation of the European platform;
the definition of functions required to operate the European platform;
the proposed rules concerning the governance and operation of the European platform, based on the principle of non-discrimination and ensuring equitable treatment of all member TSOs and that no TSO benefits from unjustified economic advantages through the participation in the functions of the European platform;
the proposed designation of the entity or entities that will perform the functions defined in the proposal. Where the TSOs propose to designate more than one entity, the proposal shall demonstrate and ensure:
a coherent allocation of the functions to the entities operating the European platform. The proposal shall take full account of the need to coordinate the different functions allocated to the entities operating the European platform;
that the proposed setup of the European platform and allocation of functions ensures efficient and effective governance, operation and regulatory oversight of the European platform as well as supports the objectives of this Regulation;
an effective coordination and decision making process to resolve any conflicting positions between entities operating the European platform;
the framework for harmonisation of the terms and conditions related to balancing set up pursuant to Article 18;
the detailed principles for sharing the common costs, including the detailed categorisation of common costs, in accordance with Article 23;
the description of the algorithm for the operation of imbalance netting process function in accordance with Article 58.
Article 23
Cost sharing between TSOs in different Member States
The costs referred to in paragraph 1 shall be broken down into:
common costs resulting from coordinated activities of all TSOs participating in the respective platforms;
regional costs resulting from activities of several but not all TSOs participating in the respective platforms;
national costs resulting from activities of the TSOs in that Member State participating in the respective platforms.
Article 24
Balancing energy gate closure time
As part of the proposals pursuant to Articles 19, 20 and 21, all TSOs shall harmonise the balancing energy gate closure time for standard products at the Union level, at least for each of the following processes:
replacement reserves;
frequency restoration reserves with manual activation;
frequency restoration reserves with automatic activation.
Balancing energy gate closure times shall:
be as close as possible to real time;
not be before the intraday cross-zonal gate closure time;
ensure sufficient time for the necessary balancing processes.
By two years after entry into force of this Regulation, each TSO applying a central dispatching model shall define at least one integrated scheduling process gate closure time which shall:
enable balancing service providers to update their integrated scheduling bids as close as possible to real time;
be no longer than eight hours before real-time;
be set before the TSO energy bid submission gate closure time.
After each integrated scheduling process gate closure time, the integrated scheduling process bid may only be changed in accordance with the rules defined by the connecting TSO in the terms and conditions for balancing service providers set up pursuant to Article 18. Those rules shall be implemented before the connecting TSO joins any process for the exchange of balancing energy and shall allow balancing service providers to update their integrated scheduling bids to the extent possible until the intraday cross-zonal gate closure time, while ensuring:
the economic efficiency of the integrated scheduling process;
operational security;
consistency of all iterations of the integrated scheduling process;
fair and equal treatment of all balancing service providers in the scheduling area;
no negative effect on the integrated scheduling process.
Each TSO applying a central dispatching model shall establish the rules for using the integrated scheduling process bids prior to the balancing energy gate closure time in accordance with Article 18( 8) (c) in order to:
ensure that the TSO meets its reserve capacity requirements in real time;
ensure sufficient resources to solve internal congestions;
ensure the possibility of feasible dispatching of power generating facilities and demand facilities in real time.
Article 25
Requirements for standard products
At least every two years, all TSOs shall review the list of standard products for balancing energy and balancing capacity. The review of standard products shall take into account:
the objectives set out in Article 3( 1);
if applicable, proposed changes to the list of standard products and the number of common merit order lists pursuant to Article 31( 2);
the performance indicators set out in Article 59( 4).
The list of standard products for balancing energy and balancing capacity may set out at least the following characteristics of a standard product bid:
preparation period;
ramping period;
full activation time;
minimum and maximum quantity;
deactivation period;
minimum and maximum duration of delivery period;
validity period;
mode of activation.
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 during the prequalification or when submitting the standard product bid:
price of the bid;
divisibility;
location;
minimum duration between the end of deactivation period and the following activation.
Standard products for balancing energy and balancing capacity shall:
ensure an efficient standardisation, foster cross-border competition and liquidity, and avoid undue market fragmentation;
facilitate the participation of demand facility owners, third parties and owners of power generating facilities from renewable energy sources as well as owners of energy storage units as balancing service providers.
Article 26
Requirements for specific products
Following the approval of the implementation frameworks for the European platforms pursuant to Articles 19, 20 and 21, each TSO may develop a proposal for defining and using specific products for balancing energy and balancing capacity. This proposal shall include at least:
a definition of specific products and of the time period in which they will be used;
a demonstration that standard products are not sufficient to ensure operational security and to maintain the system balance efficiently or a demonstration that some balancing resources cannot participate in the balancing market through standard products;
a description of measures proposed to minimise the use of specific products subject to economic efficiency;
where applicable, the rules for converting the balancing energy bids from specific products into balancing energy bids from standard products;
where applicable, the information on the process for the conversion of balancing energy bids from specific products into balancing energy bids from standard products and the information on which common merit order list the conversion will take place;
a demonstration that the specific products do not create significant inefficiencies and distortions in the balancing market within and outside the scheduling area.
The specific products shall be implemented in parallel to the implementation of the standard products. Following the use of the specific products, the connecting TSO may alternatively:
convert the balancing energy bids from specific products into balancing energy bids from standard products;
activate the balancing energy bids from specific products locally without exchanging them.
The rules for converting balancing energy bids from specific products into balancing energy bids from standard products pursuant to paragraph 1(d) shall:
be fair, transparent and non-discriminatory;
not create barriers for the exchange of balancing services;
ensure the financial neutrality of TSOs.
Article 27
Conversion of bids in a central dispatching model
Each TSO applying a central dispatching model shall convert as far as possible the integrated scheduling process bids pursuant to paragraph 2 into standard products taking into account operational security. The rules for converting the integrated scheduling process bids into standard products shall:
be fair, transparent and non-discriminatory;
not create barriers for the exchange of balancing services;
ensure the financial neutrality of TSOs.
Article 28
Fall-back procedures
TITLE III
PROCUREMENT OF BALANCING SERVICES
CHAPTER 1
Balancing energy
Article 29
Activation of balancing energy bids from common merit order list
By one year after the entry into force of this Regulation, all TSOs shall develop a proposal for a methodology for classifying the activation purposes of balancing energy bids. This methodology shall:
describe all possible purposes for the activation of balancing energy bids;
define classification criteria for each possible activation purpose.
Each connecting TSO shall submit, prior to the TSO energy bid submission gate closure time, all balancing energy bids received from balancing service providers to the activation optimisation function, taking into account the requirements in Articles 26 and 27. The connecting TSOs shall not modify or withhold balancing energy bids, except for:
balancing energy bids related to Articles 26 and 27;
balancing energy bids that are manifestly erroneous and include an unfeasible delivery volume;
balancing energy bids that are not forwarded to the European platforms in accordance with paragraph 10.
Each TSO applying a self-dispatching model and operating within a scheduling area with a local intraday gate closure time after the balancing energy gate closure time pursuant to Article 24 may develop a proposal to limit the amount of bids that is forwarded to the European platforms pursuant to Articles 19 to 21. The bids forwarded to the European platforms shall always be the cheapest bids. This proposal shall include:
the definition of the minimum volume that shall be forwarded to the European platforms. The minimum volume of bids submitted by the TSO shall be equal to or higher than the sum of the reserve capacity requirements for its LFC block according to Articles 157 and 160 of Regulation (EU) 2017/1485 and the obligations arising from the exchange of balancing capacity or sharing of reserves;
the rules to release the bids that are not submitted to the European platforms and the definition of the point in time at which the concerned balancing service providers shall be informed of the release of its bids.
At least once every two years after the approval of the proposal in paragraph 10 by the respective regulatory authority, all TSOs shall assess the impact of limiting the volume of bids sent to the European platforms and the functioning of the intraday market. This assessment shall include:
an evaluation by the relevant TSOs on the minimum volume of bids that shall be forwarded to the European platforms pursuant to paragraph 10(a);
a recommendation to the relevant TSOs limiting balancing energy bids.
Based on this assessment, all TSOs shall make a proposal to all regulatory authorities to review the minimum volume of balancing energy bids that shall be forwarded to the European platforms pursuant to paragraph 10(a).
Each requesting TSO may request the activation of balancing energy bids from the common merit order lists up to the total volume of balancing energy. The total volume of balancing energy that can be activated by the requesting TSO from balancing energy bids from the common merit order lists is calculated as a sum of volumes of:
balancing energy bids submitted by the requesting TSO not resulting from sharing of reserves or exchange of balancing capacity;
balancing energy bids submitted by other TSOs as a result of balancing capacity procured on behalf of the requesting TSO;
balancing energy bids resulting from the sharing of reserves under the condition that the other TSOs participating in the sharing of reserves have not already requested the activation of those shared volumes.
Article 30
Pricing for balancing energy and cross-zonal capacity used for exchange of balancing energy or for operating the imbalance netting process
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:
be based on marginal pricing (pay-as-cleared);
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;
establish at least one price of balancing energy, for each imbalance settlement period;
give correct price signals and incentives to market participants;
take into account the pricing method in the day-ahead and intraday timeframes.
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 Regulation (EU) 2015/1222, and:
reflect market congestion;
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;
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.
Article 31
Activation optimisation function
All TSOs shall establish an activation optimisation function in accordance with Article 29 and this Article for the optimisation of the activation of balancing energy bids from different common merit order lists. This function shall take into account at least:
activation processes and technical constrains from different balancing energy products;
operational security;
all balancing energy bids included in the compatible common merit order lists;
the possibility to net the counteracting activation requests from TSOs;
submitted activation requests of all TSOs;
available cross-zonal capacity.
CHAPTER 2
Balancing capacity
Article 32
Procurement rules
All TSOs of the LFC block shall regularly and at least once a year review and define the reserve capacity requirements for the LFC block or scheduling areas of the LFC block pursuant to dimensioning rules as referred in Articles 127, 157 and 160 of Regulation (EU) 2017/1485. Each TSO shall perform an analysis on optimal provision of reserve capacity aiming at minimisation of costs associated with the provision of reserve capacity. This analysis shall take into account the following options for the provision of reserve capacity:
procurement of balancing capacity within control area and exchange of balancing capacity with neighbouring TSOs, when applicable;
sharing of reserves, when applicable;
the volume of non-contracted balancing energy bids which are expected to be available both within their control area and within the European platforms taking into account the available cross-zonal capacity.
Each TSO procuring balancing capacity shall define the rules for the procurement of balancing capacity in the proposal for the terms and conditions related to balancing service providers developed pursuant to Article 18. The rules for the procurement of balancing capacity shall comply with the following principles:
the procurement method shall be market-based for at least the frequency restoration reserves and the replacement reserves;
the procurement process shall be performed on a short-term basis to the extent possible and where economically efficient;
the contracted volume may be divided into several contracting periods.
The procurement of upward and downward balancing capacity for at least the frequency restoration reserves and the replacement reserves shall be carried out separately. Each TSO may submit a proposal to the relevant regulatory authority in accordance with Article 37 of Directive 2009/72/EC requesting the exemption to this requirement. The proposal for exemption shall include:
specification of the time period during which the exemption would apply;
specification of the volume of balancing capacity for which the exemption would apply;
analysis of the impact of such an exemption on the participation of balancing resources pursuant to Article 25(6)(b);
justification for the exemption demonstrating that such an exemption would lead to higher economic efficiency.
Article 33
Exchange of balancing capacity
All TSOs exchanging balancing capacity shall ensure both the availability of cross-zonal capacity and that the operational security requirements set out in Regulation (EU) 2017/1485 are met, either by:
the methodology for calculating the probability of available cross-zonal capacity after intraday cross-zonal gate closure time pursuant to paragraph 6;
the methodologies for allocating cross-zonal capacity to the balancing timeframe pursuant to Chapter 2 of Title IV.
TSOs exchanging balancing capacity for frequency restoration reserves and replacement reserves may develop a proposal for a methodology for calculating the probability of available cross-zonal capacity after intraday cross-zonal gate closure time. The methodology shall at least describe:
the procedures to notify to other TSOs in the LFC block;
the description of the process to perform the assessment for the relevant period for the exchange of balancing capacity;
the method to assess the risk of unavailability of cross-zonal capacity due to planned and unplanned outages and due to congestions;
the method to assess the risk of insufficient reserve capacity due to unavailability of cross-zonal capacity;
the requirements for a fall-back solution in case of unavailability of cross-zonal capacity or insufficient reserve capacity;
the requirements for ex-post review and monitoring of risks;
the rules in order to ensure the settlement pursuant to Title V.
Article 34
Transfer of balancing capacity
The transfer of balancing capacity shall be allowed if the following conditions are met:
the receiving balancing service provider has passed the qualification process for the balancing capacity for which the transfer is performed;
the transfer of balancing capacity is not expected to endanger operational security;
the transfer of balancing capacity does not exceed the operational limits set out in Chapters 1 and 2 of Part IV Title VIII of Regulation (EU) 2017/1485.
In case the transfer of balancing capacity requires the use of cross-zonal capacity, such transfer shall only be allowed in case:
the cross-zonal capacity required to perform the transfer is already available from previous allocation processes pursuant to Chapter 2 of Title IV;
the cross-zonal capacity is available pursuant to the methodology for calculating the probability of available cross-zonal capacity after intraday cross-zonal gate closure time in accordance with Article 33(6).
CHAPTER 3
TSO-BSP model
Article 35
Exchange of balancing services
The proposal for application of a TSO-BSP model shall include:
a cost-benefit analysis performed pursuant to Article 61 that identifies the efficiencies of applying the TSO-BSP model for at least the scheduling area or scheduling areas of the TSOs involved;
the requested application period;
a description of the methodology for ensuring sufficient cross-zonal capacity in accordance with Article 33(6).
TITLE IV
CROSS-ZONAL CAPACITY FOR BALANCING SERVICES
CHAPTER 1
Exchange of balancing energy or imbalance netting process
Article 36
Use of cross-zonal capacity
Two or more TSOs exchanging balancing capacity may use cross-zonal capacity for the exchange of balancing energy when cross-zonal capacity is:
available pursuant to Article 33(6);
released pursuant to paragraphs 8 and 9 of Article 38;
allocated pursuant to Articles 40, 41 and 42.
Article 37
Cross-zonal capacity calculation
CHAPTER 2
Exchange of balancing capacity or sharing of reserves
Article 38
General requirements
Two or more TSOs may at their initiative or at the request of their relevant regulatory authorities in accordance with Article 37 of Directive 2009/72/EC set up a proposal for the application of one of the following processes:
co-optimised allocation process pursuant to Article 40;
market-based allocation process pursuant to Article 41;
allocation process based on economic efficiency analysis pursuant to Article 42.
Cross-zonal capacity allocated for the exchange of balancing capacity or sharing of reserves before the entry into force of this Regulation may continue to be used for that purpose until the expiry of the contracting period.
The proposal for the application of the allocation process shall include:
the bidding zone borders, the market timeframe, the duration of application and the methodology to be applied;
in case of allocation process based on economic efficiency analysis, the volume of allocated cross zonal capacity and the actual economic efficiency analysis justifying the efficiency of such allocation.
Article 39
Calculation of market value of cross-zonal capacity
The forecasted market value of cross-zonal capacity shall be based on one of the following alternative principles:
the use of transparent market indicators that disclose the market value of cross-zonal capacity; or
the use of a forecasting methodology enabling the accurate and reliable assessment of the market value of cross-zonal capacity.
The forecasted market value of cross-zonal capacity for the exchange of energy between bidding zones shall be calculated based on the expected differences in market prices of the day-ahead and, where relevant and possible, intraday markets between bidding zones. When calculating the forecasted market value, additional relevant factors influencing demand and generation patterns in the different bidding zones shall be taken duly into account.
Article 40
Co-optimised allocation process
By two years after entry into force of this Regulation, all TSOs shall develop a proposal for a methodology for a co-optimised allocation process of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves. This methodology shall apply for the exchange of balancing capacity or sharing of reserves with a contracting period of not more than one day and where the contracting is done not more than one day in advance of the provision of the balancing capacity. The methodology shall include:
the notification process for the use of the co-optimised allocation process;
a detailed description of how cross-zonal capacity shall be allocated to bids for the exchange of energy and bids for the exchange of balancing capacity or sharing of reserves in a single optimisation process performed for both implicit and explicit auctions;
a detailed description of the pricing method, the firmness regime and the sharing of congestion income for the cross-zonal capacity that has been allocated to bids for the exchange of balancing capacity or sharing of reserves via the co-optimised allocation process;
the process to define the maximum volume of allocated cross-zonal capacity for the exchange of balancing capacity or sharing of reserves.
Article 41
Market-based allocation process
By two years after entry into force of this Regulation, all TSOs of a capacity calculation region may develop a proposal for a methodology for a market-based allocation process of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves. This methodology shall apply for the exchange of balancing capacity or sharing of reserves with a contracting period of not more than one day and where the contracting is done not more than one week in advance of the provision of the balancing capacity. The methodology shall include:
the notification process for the use of the market-based allocation process;
a detailed description of how to determine the actual market value of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves, and the forecasted market value of cross-zonal capacity for the exchange of energy, and if applicable the actual market value of cross-zonal capacity for exchanges of energy and the forecasted market value of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves;
a detailed description of the pricing method, the firmness regime and the sharing of congestion income for the cross-zonal capacity that has been allocated to bids for the exchange of balancing capacity or sharing of reserves via the market-based allocation process;
the process to define the maximum volume of allocated cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to paragraph 2.
This volume limitation may not apply where the contracting is done not more than two days in advance of the provision of the balancing capacity or for bidding zone borders connected through DC interconnectors until the co-optimised allocation process is harmonised at Union level pursuant to Article 38(3).
Article 42
Allocation process based on economic efficiency analysis
By two years after entry into force of this Regulation, all TSOs of a capacity calculation region may develop a proposal for a methodology for the allocation of cross-zonal capacity based on an economic efficiency analysis. Such methodology shall apply for the exchange of balancing capacity or sharing of reserves with a contracting period of more than one day and where the contracting is done more than one week in advance of the provision of the balancing capacity. The methodology shall include:
the rules and principles for allocating cross-zonal capacity based on an economic efficiency analysis;
a detailed description of how to determine the forecasted market value of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves, and an assessment of the market value of cross-zonal capacity for the exchange of energy;
a detailed description of the pricing method, firmness regime and the sharing of congestion income for the cross-zonal capacity that has been allocated based on an economic efficiency analysis;
the maximum volume of allocated cross-zonal capacity for the exchange of balancing capacity or sharing of reserves pursuant to paragraph 2.
TSOs referred to in paragraph 1 shall develop a proposal for a list of each individual allocation of cross-zonal capacity based on an economic efficiency analysis. Such list shall include:
the specification of the bidding zone border;
the volume of allocated cross-zonal capacity;
the period during which the cross-zonal capacity would be allocated for the exchange of balancing capacity or sharing of reserves;
the economic analysis justifying the efficiency of such allocation.
Article 43
Use of cross-zonal capacity by balancing service providers
TITLE V
SETTLEMENT
CHAPTER 1
Settlement principles
Article 44
General principles
The settlement processes shall:
establish adequate economic signals which reflect the imbalance situation;
ensure that imbalances are settled at a price that reflects the real time value of energy;
provide incentives to balance responsible parties to be in balance or help the system to restore its balance;
facilitate harmonisation of imbalance settlement mechanisms;
provide incentives to TSOs to fulfil their obligations pursuant to Article 127, Article 153, Article 157 and Article 160 of Regulation (EU) 2017/1485;
avoid distorting incentives to balance responsible parties, balancing service providers and TSOs;
support competition among market participants;
provide incentives to balancing service providers to offer and deliver balancing services to the connecting TSO;
ensure the financial neutrality of all TSOs.
CHAPTER 2
Settlement of balancing energy
Article 45
Balancing energy calculation
As regards the settlement of balancing energy for at least the frequency restoration process and the reserve replacement process, each TSO shall establish a procedure for:
the calculation of the activated volume of balancing energy based on requested or metered activation;
claiming the recalculation of the activated volume of balancing energy.
Each TSO shall calculate the activated volume of balancing energy according to the procedures pursuant to paragraph 1(a) at least for:
each imbalance settlement period;
its imbalance areas;
each direction, with a negative sign indicating relative withdrawal by the balancing service provider, and a positive sign indicating relative injection by the balancing service provider.
Article 46
Balancing energy for frequency containment process
The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency containment process shall be defined for each direction as defined in Table 1:
Table 1
Payment for balancing energy
|
|
Balancing energy price positive |
Balancing energy price negative |
|
Positive balancing energy |
Payment from TSO to BSP |
Payment from BSP to TSO |
|
Negative balancing energy |
Payment from BSP to TSO |
Payment from TSO to BSP |
Article 47
Balancing energy for frequency restoration process
Article 48
Balancing energy for reserve replacement process
Article 49
Imbalance adjustment to the balance responsible party
CHAPTER 3
Settlement of the exchanges of energy between TSOs
Article 50
Intended exchanges of energy
By one year after the entry into force of this Regulation, all TSOs shall develop a proposal for common settlement rules applicable to all intended exchanges of energy as a result of one or more of the following processes pursuant to Articles 146, 147 and 148 of Regulation (EU) 2017/1485, for each of the following:
the reserve replacement process;
the frequency restoration process with manual activation;
the frequency restoration process with automatic activation;
the imbalance netting process.
By eighteen months after the entry into force of this Regulation, all TSOs intentionally exchanging energy within a synchronous area shall develop a proposal for common settlement rules applicable to intended exchanges of energy, as a result of one or both:
the frequency containment process pursuant to Article 142 of Regulation (EU) 2017/1485;
the ramping period pursuant to Article 136 of Regulation (EU) 2017/1485.
By eighteen months after the entry into force of this Regulation, all asynchronously connected TSOs intentionally exchanging energy between synchronous areas shall develop a proposal for common settlement rules applicable to intended exchanges of energy, as a result of one or both:
frequency containment process for active power output on synchronous area level pursuant to Articles 172 and 173 of Regulation (EU) 2017/1485;
ramping restrictions for active power output on synchronous area level pursuant to Article 137 of Regulation (EU) 2017/1485.
The common settlement rules in accordance with paragraph 1 shall at least contain the provisions that the intended exchange of energy is calculated on the basis of the following criteria:
over periods agreed among relevant TSOs;
per direction;
as the integral of the calculated power interchange over the periods pursuant to paragraph 5 (a).
The common settlement rules of intended exchanges of energy in accordance with paragraphs 1(a), 1(b) and 1(c) shall take into account:
all balancing energy prices established pursuant Article 30(1);
the methodology for pricing of cross-zonal capacity used for the exchange of balancing energy pursuant Article 30(3).
Article 51
Unintended exchanges of energy
By eighteen months after the entry into force of this Regulation, all TSOs of a synchronous area shall develop a proposal for common settlement rules applicable to all unintended exchanges of energy. The proposal shall include the following requirements:
the price for unintended exchanges of energy withdrawn from the synchronous area shall reflect the prices for activated upward balancing energy for frequency restoration process or reserve replacement process for this synchronous area;
the price for unintended exchanges of energy injected into the synchronous area shall reflect the prices for activated downward balancing energy for frequency restoration process or reserve replacement process for this synchronous area.
CHAPTER 4
Imbalance settlement
Article 52
Imbalance settlement
By one year after entry into force of this Regulation, all TSOs shall develop a proposal to further specify and harmonise at least:
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);
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;
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
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:
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;
the methodology for applying dual pricing.
Article 53
Imbalance settlement period
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:
for each balance responsible party;
for each imbalance settlement period;
in each imbalance 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:
balance responsible party has one single final position equal to the sum of its external commercial trade schedules and internal commercial trade schedules;
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;
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:
the calculation of the final position;
the determination of the allocated volume;
the determination of the imbalance adjustment pursuant to Article 49;
the calculation of the imbalance;
claiming the recalculation of the imbalance by a balance responsible party.
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 negative sign, indicating a balance responsible party's shortage;
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 |
Each TSO shall determine the imbalance price for:
each imbalance settlement period;
its imbalance price areas;
each imbalance direction.
The imbalance price for negative imbalance shall not be less than, alternatively:
the weighted average price for positive activated balancing energy from frequency restoration reserves and replacement reserves;
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:
the weighted average price for negative activated balancing energy from frequency restoration reserves and replacement reserves;
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.
CHAPTER 5
Settlement of balancing capacity
Article 56
Procurement within a scheduling area
Article 57
Procurement outside a scheduling area
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:
respect the activation method of balancing energy bids pursuant to Article 29;
respect the pricing method for balancing energy pursuant to Article 30;
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 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:
minimise the overall procurement costs of all jointly procured balancing capacity;
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:
respect operational security constraints;
take into account technical and network constraints;
if applicable, take into account the available cross-zonal capacity.
TITLE VII
REPORTING
Article 59
European report on integration of balancing markets
The format of the report shall vary as follow:
two years after entry into force of this Regulation and subsequently every second year a detailed report shall be published;
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:
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;
describe the status of implementation projects pursuant to this Regulation;
assess the compatibility between the implementation projects and investigate any possible developments that pose a risk for future integration;
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;
describe the existing and analyse the potential exchanges of balancing services;
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;
assess the need for further harmonisation of standard products and possible effects of non-harmonisation on integration of balancing markets;
assess the existence and justifications for specific products used by TSOs and their effect on the integration of balancing markets;
assess the progress of harmonisation of the main features of imbalance settlement as well as the consequences and possible distortions due to non-harmonisation;
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:
the availability of balancing energy bids, including the bids from balancing capacity;
the monetary gains and savings due to imbalance netting, exchange of balancing services and sharing of reserves;
the benefits from the use of standard products;
the total cost of balancing;
the economic efficiency and reliability of the balancing markets;
the possible inefficiencies and distortions on balancing markets;
the efficiency losses due to specific products;
the volume and price of balancing energy used for balancing purposes, both available and activated, from standard products and from specific products;
the imbalance prices and the system imbalances;
the evolution of balancing service prices of the previous years;
the comparison of expected and realised costs and benefits from all allocations of cross-zonal capacity for balancing purposes.
Article 60
TSO report on balancing
The report on balancing shall:
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;
provide the summary analysis of the dimensioning of reserve capacity including the justification and explanation for the calculated reserve capacity requirements;
provide the summary analysis of the optimal provision of reserve capacity including the justification of the volume of balancing capacity;
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;
analyse the opportunities for the exchange of balancing capacity and sharing of reserves;
provide an explanation and a justification for the procurement of balancing capacity without the exchange of balancing capacity or sharing of reserves;
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.
TITLE VIII
COST-BENEFIT ANALYSIS
Article 61
Cost-benefit analysis
The cost-benefit analysis shall at least take into account:
the technical feasibility;
the economic efficiency;
the impact on competition and integration of balancing markets;
the costs and benefits of implementation;
the impact on European and national balancing costs;
the potential impact on European electricity market prices;
the ability of TSOs and balancing responsible parties to fulfil their obligations;
the impact on market parties in terms of additional technical or IT requirements assessed in cooperation with the affected stakeholders.
TITLE IX
DEROGATIONS AND MONITORING
Article 62
Derogations
A TSO may request a derogation from the following requirements:
the deadlines by which a TSO shall use the European platforms pursuant to Articles 19(5), 20(6), 21(6) and 22(5);
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);
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);
the harmonisation of the imbalance settlement period in Article 53(1);
the implementation of the requirements pursuant to Articles 45, 46, 47, 48, 49, 50, 51, 54, 55, 56 and 57.
The request for derogation shall include the following information:
the provisions from which a derogation is requested;
the requested derogation period;
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;
an assessment of the consequences of requested derogation on adjacent markets;
an assessment of the possible risks for the integration of balancing markets across Europe caused by the requested derogation.
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:
the relevant regulatory authority decides to provide an extension;
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:
the difficulties related to the implementation of the concerned provision or provisions;
the risks and the implications of the concerned provision or provisions, in terms of operational security;
the actions taken to facilitate the implementation of the concerned provision or provisions;
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;
the impacts on overall economic efficiency and smart grid infrastructure;
the impacts on other scheduling areas and overall consequences on the European market integration process.
The register shall contain, in particular:
the provisions from which the derogation is granted or refused;
the content of the derogation;
the reasons for granting or refusing the derogation;
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:
preparation of the European report on integration of balancing market pursuant to Article 59;
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.
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 be binding in its entirety and directly applicable in all Member States.
( 1 ) 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).
( 2 ) 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).
( 3 ) 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).
( 4 ) Commission Regulation (EU) 2016/1388 of 17 August 2016 establishing a network code on demand connection (OJ L 223, 18.8.2016, p. 10).
( 5 ) 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).
( 6 ) Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (OJ L 259, 27.9.2016, p. 42).
( 7 ) 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).