Cross Border Electricity Balancing Pilot Projects

​​​​​​​​Electricity balancing is crucial to ensure security of supply and has an important bearing on costs for consumers. Compared to other electricity market timeframes, balancing markets represent only 2-3% of the total turnover volume of wholesale markets; nevertheless, in a recent report commissioned by the European Commission, the potential gains are shown for balancing resources to be effectively shared between countries, enhancing security of supply and reducing costs, whilst using resources more efficiently. This represents a strong rationale for developing cross border balancing markets.

Moreover, a cross border balancing market will help to counteract the effects of intermittent generation and allow the integration of more renewable energy sources.

While the integration of the European energy markets follows rather clear target models – as for capacity allocation rules set out in the binding guidelines on Capacity Allocation and Congestion Management (CACM) and the Network Code on Forward Capacity Allocation (NC FCA) – different kinds of balancing services have not yet been detailed. The ENTSO-E Survey on Ancillary Services Procurement and Balancing Market design, published in 2012, shows the diversity in current balancing markets and highlights the challenge for harmonisation.

The future Network Code on Electricity Balancing (NC EB) will lay out the processes for developing market based co-operation and implementing the steps towards regional and European integration which will, in turn, allow for the achievement of efficiency gains while also maintaining operational security.

ENTSO-E fully supports the proposed European Balancing Market (EBM) and has proposed several cross border pilot projects with the purpose of:

• Testing the feasibility of the European (target) model and intermediate steps established in the ACER Framework Guidelines on Electricity Balancing (FG EB);
• Evaluating the associated implementation impact;
• Reporting on the experience gained.

What is the obje​ctive?

The detailed objectives of the pilot projects are:

• To gain bottom-up experience for the implementation of the different steps towards a EBM;
• To create awareness of the EBM, provide information to stakeholders and receive constructive feedback;
• To gain experience of product definitions and pricing mechanisms (to support proposals to be sent to ACER one year after entry into force of the NC EB);
• To identify and overcome barriers during actual implementation related to regulatory issues, IT developments (specification / design of the common cross border balancing platform, analysis of IT changes at national level), cost recognition, interaction of the balancing market with future European intraday energy market (updating of balancing bids, interaction with the cross border capacity management modules);
• To analyse governance issues - roles and responsibilities regarding cross border platform management, cross border interconnection capacity management, settlement between TSOs, etc.;
• To provide an insight into which aspects are to be harmonised and to what degree;
• To provide an insight into social welfare definition and monitoring in order to gain experience about net benefits (cost/benefit reports) at different levels (national, regional etc.);
• To test the feasibility of the different milestones in the draft Network Code on Electricity Balancing and to test the impact of the long term target.The scope of the feasibility analysis includes issues such as regulatory changes, analysis of changes made to existing processes, and impact on the design of existing markets as well as any operational impacts.

Overview of the on-going pilot projects

Reporting​​

The following reports include the main information regarding each pilot project and include a description of the implementation of targets relevant to the Network code on Electricity Balancing (NC EB). Alongside these updates on additional achievements are also listed.

• Project 1
• Project 2 ​
• Project 3 ​
• Project 4
• Project 5 ​
• Project 7 ​
• Project 8 ​
• Project 9

Pilot Project - Contacts

A list of contacts from TSOs/ENTSO-E and NRAs/ACER for Pilot Projects is available.

Download the list of pilot project c​on​tacts

Stakeholder Involvement

Cross Border Balancing Pilot Projects Stakeholder Meetings:

Project-specific stakeholder events

Related Links

Go to original page

Cost Benefit Analysis for the Imbalance Settlement Period

• CBA of a change to the imbalance settlement period report

Cost Benefit Analysis according to NC EB

The Network Code on Electricity Balancing (NC EB)1 covers three major aspects of balancing namely:

• Procurement of balancing services;
• Reservation and use of cross zonal capacity for balancing; and
• TSO settlements.

The NC EB requires a cost benefit analysis (CBA) be undertaken in support of various decisions:

• European Integration Model (Article 16(3), 18(3), 20(3), 22(3)): CBA to support TSOs’ proposal to modify the European integration model (Replacement Reserves (RR), Frequency Restoration Reserves with manual activation (FRR-m), Frequency Restoration Reserves with automatic activation (FRR-a)), and the imbalance netting process); and

• Application of a TSO-BSP model (Article 41(2)): CBA to identify the efficiency of the application of a TSO-BSP model for at least the control area or scheduling area for the relevant TSOs. In addition, the Agency for the Cooperation of Energy Regulators (ACER) proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

In addition, the Agency for the Cooperation of Energy Regulators (ACER) proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

Methodologies for performing CBAs

ENTSO-E has asked Frontier Economics and Consentec to develop a general methodology for TSOs in relation to the completion of the CBAs envisaged in the NC EB, and a specific methodology for the completion of the CBA for ISP harmonisation.

• Cost Benefit Analysis for Electricity Balancing – ISP harmonisation methodology
• Cost Benefit Analysis for Electricity Balancing – general methodology

Cost benefit analysis for the Imbalance Settlement Period

The NC EB requires all TSOs to develop a proposal to harmonise the main features of imbalance settlement, subject to approval by all NRAs. However, the Imbalance Settlement Period duration falls outside this proposal and will be drafted into the final version of the NC EB. ACER has reviewed the draft NC EB and has proposed that the Imbalance Settlement Period duration be harmonised at 15 minutes. ACER also proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis (CBA) to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

Following on from the development of the methodologies, ENTSO-E has asked Frontier to support the process of undertaking a CBA of a change in ISP. To secure relevant inputs to the CBA process, ENTSO-E is asking for data from stakeholders across Europe, via a questionnaire.

Final Report

• CBA of a change to the imbalance settlement period

Consultation Documents

• Guidebook - Cost Benefit Analysis for Imbalance Settlement Period Harmonisation
• Download - ​Questionnaire (please press cancel in the password query or select “save target as…” to save the file)​
• ISP Harmonisation CBA Information Req​uest - Questions and Answ​ers (V7)​​

Time planning

• 13 November 2015: ENTSO-E distributes questionnaire to stakeholders.​
• 7 December 10:00 -12:00 (extension possible until 14:00): Stakeholder webconference Q&A.
• 7 January 10:00 – 12:00 (extension possible until 14:00): Stakeholder webconference Q&A.
• 14 Janu​ary 2016: Deadline for submitting answered questionnaires
• 14-27​ January 2016: Deadline for ENTSO-E data consolidation and review ​- 8 March 2016, 10:00-13:00, webinar:
  Webinar Over​​ Download ​Webinar Presentation​​
• 13 April 2016, Balancing Stakeholder Group Meeting for BSG members

ENTSO-E invites stakeholder to participate in the survey. Feedback is desired from stakeholders from EU countries, Liechtenstein, Norway and Switzerland​. Feedback from stakeholders from other countries, such as the Energy Community, is also welcomed.​

• Aggregator
• Broker
• Data provider
• DSO
• End consumer (metered)
• Generator (metered)
• Market operator
• Meter provider
• Metering service provider
• NRA
• Power exchange
• Retail supplier
• Trader
• TSO​
• Others

For information and to send input on the CBA on ISP please use the following email address alexander.dusolt@entsoe.eu.​