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:

(1) ‘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;

(2) ‘balancing market’ means the entirety of institutional, commercial and operational arrangements that establish market-based management of balancing;

(3) ‘balancing services’ means balancing energy or balancing capacity, or both;

(4) ‘balancing energy’ means energy used by TSOs to perform balancing and provided by a balancing service provider;

(5) ‘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;

(6) ‘balancing service provider’ means a market participant with reserve-providing units or reserve-providing groups able to provide balancing services to TSOs;

(7) ‘balance responsible party’ means a market participant or its chosen representative responsible for its imbalances;

(8) ‘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;

(9) ‘imbalance settlement’ means a financial settlement mechanism for charging or paying balance responsible parties for their imbalances;

(10) ‘imbalance settlement period’ means the time unit for which balance responsible parties' imbalance is calculated;

(11) ‘imbalance area’ means the area in which an imbalance is calculated;

(12) ‘imbalance price’ means the price, be it positive, zero or negative, in each imbalance settlement period for an imbalance in each direction;

(13) ‘imbalance price area’ means the area for the calculation of an imbalance price;

(14) ‘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;

(15) ‘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;

(16) ‘position’ means the declared energy volume of a balance responsible party used for the calculation of its imbalance;

(17) ‘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;

(18) ‘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;

(19) ‘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;

(20) ‘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;

(21) ‘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;

(22) ‘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;

(23) ‘exchange of balancing services’ means either or both exchange of balancing energy and exchange of balancing capacity;

(24) ‘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;

(25) ‘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;

(26) ‘transfer of balancing capacity’ means a transfer of balancing capacity from the initially contracted balancing service provider to another balancing service provider;

(27) ‘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;

(28) ‘standard product’ means a harmonised balancing product defined by all TSOs for the exchange of balancing services;

(29) ‘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;

(30) ‘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;

(31) ‘deactivation period’ means the period for ramping from full delivery to a set point, or from full withdrawal back to a set point;

(32) ‘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;

(33) ‘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;

(34) ‘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;

(35) ‘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;

(36) ‘specific product’ means a product different from a standard product;

(37) ‘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;

(38) ‘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;

(39) ‘activation optimisation function’ means the function of operating the algorithm applied to optimise the activation of balancing energy bids;

(40) ‘imbalance netting process function’ means the role to operate the algorithm applied for operating the imbalance netting process;

(41) ‘TSO-TSO settlement function’ means the function of performing the settlement of cooperation processes between the TSOs;

(42) ‘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.

(43) ‘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;

(44) ‘contracting TSO’ means the TSO that has contractual arrangements for balancing services with a balancing service provider in another scheduling area;

(45) ‘requesting TSO’ means the TSO that requests the delivery of balancing energy.

Article 3

Objectives and regulatory aspects

This Regulation aims at:

(a) fostering effective competition, non-discrimination and transparency in balancing markets;

(b) enhancing efficiency of balancing as well as efficiency of European and national balancing markets;

(c) integrating balancing markets and promoting the possibilities for exchanges of balancing services while contributing to operational security;

(d) 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;

(e) 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;

(f) 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;

(g) 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:

(a) apply the principles of proportionality and non-discrimination;

(b) ensure transparency;

(c) apply the principle of optimisation between the highest overall efficiency and lowest total costs for all parties involved;

(d) ensure that TSOs make use of market-based mechanisms, as far as possible, in order to ensure network security and stability;

(e) ensure that the development of the forward, day-ahead and intraday markets is not compromised;

(f) respect the responsibility assigned to the relevant TSO in order to ensure system security, including as required by national legislation;

(g) consult with relevant DSOs and take account of potential impacts on their system;

(h) 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:

(a) TSOs representing at least 55 % of the Member States; and

(b) 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:

(a) TSOs representing at least 72 % of the Member States concerned; and

(b) 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:

(a) the frameworks for the establishment of the European platforms pursuant to Articles 20(1), 21(1) and 22(1);

(b) the modifications of the frameworks for the establishment of the European platforms pursuant to Articles 20(5) and 21(5);

(c) the standard products for balancing capacity pursuant to Article 25(2);

(d) the classification methodology for the activation purposes of balancing energy bids pursuant to Article 29(3);

(e) 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);

(f) 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);

(g) 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);

(h) the methodology for a co-optimised allocation process of cross-zonal capacity pursuant to Article 40(1);

(i) the TSO-TSO settlement rules for the intended exchange of energy pursuant to Article 50(1);

(j) 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:

(a) 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);

(b) 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);

(c) 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);

(d) 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);

(e) the application of a TSO-BSP model, in a geographical area comprising two or more TSOs, pursuant to Article 35(1);

(f) the cross-zonal capacity calculation methodology for each capacity calculation region pursuant to Article 37(3);

(g) 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);

(h) for each capacity calculation region, the methodology for a market-based allocation process of cross-zonal capacity pursuant to Article 41(1);

(i) 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);

(j) 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);

(k) 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);

(l) for each synchronous area, the TSO-TSO settlement rules for the unintended exchange of energy pursuant to Article 51(1);

(m) 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);

(n) the exemption, at synchronous area level, to the harmonisation of the imbalance settlement periods pursuant to Article 53(2);

(o) 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:

(a) 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);

(b) where appropriate, the methodology for allocating costs resulting from actions taken by DSOs, pursuant to Article 15(3);

(c) the terms and conditions related to balancing pursuant to Article 18;

(d) the definition and the use of specific products pursuant to Article 26(1);

(e) the limitation on the amount of bids that is forwarded to the European platforms pursuant to Article 29(10);

(f) the exemption to separate procurement of upward and downward balancing capacity pursuant to Article 32(3);