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General Provisions

Terms and conditions or methodologies

TSOs shall apply the following methodologies, any amendments thereof shall be subject to approval by the Agency for the Cooperation of Energy Regulators. The Articles mentioned below refer to Commission Regulation (EU) 2017/2195, links are provided to the respective approved methodologies:

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:

  • 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;

  • 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) (co-optimisation, market-based or economic efficiency);

  • for the geographical area comprising two or more TSOs exchanging balancing capacity, the principles for balancing algorithms pursuant to Article 58(3).

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 Contracting Party 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);

Where TSOs deciding on proposals for terms and conditions or methodologies that are subject to approval by all regulatory authorities in the concerned region are not able to reach an agreement, and where the regions concerned are composed of more than three Member States and/or Contracting Parties, they shall decide by two third majority voting. Where the concerned region is composed of three Member States and/or Contracting Parties or less the concerned TSOs shall decide based on consensus.

No later than six months after entry into force of this Regulation and for all scheduling areas of a Contracting Party, the TSOs of this Contracting Party shall develop a proposal regarding:

  • the terms and conditions for balancing service providers;

  • the terms and conditions for balance responsible parties.

The terms and conditions for balancing service providers shall contain:

  • 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;

  • a maximum period for the finalisation of the settlement of balancing energy with a balancing service provider for any given imbalance settlement period;

  • the consequences in case of non-compliance with the terms and conditions applicable to balancing service providers.

Derogations

A regulatory authority in accordance with Article 59 of Directive (EU) 2019/944 may, at the request of a TSO or at its own initiative, grant the relevant TSOs a derogation from one or more provisions of this Regulation.

A TSO may request a derogation from the following requirements:

  • the deadlines by which a TSO shall use the European platforms for replacement reserves, restoration reserves with manual activation, restoration reserves with automatic activation and for imbalance netting;

  • the definition of the integrated scheduling process gate closure time in a central dispatching model and the possibility to change the integrated scheduling process bids;

  • the maximum volume of cross-zonal capacity allocated on a market-based process or a process based an economic efficiency analysis;

  • the harmonisation of the imbalance settlement period;

  • the implementation of the requirements for settlement of balancing energy, settlement of exchanges of energy between TSOs, settlement of balancing capacity and imbalance settlement.

Where the relevant regulatory authority grants a derogation, it shall specify its duration. The derogation may be granted only once and for a maximum period of two years, except for the derogations from the provisions on maximum volume of cross-zonal capacity allocated on a market-based process or a process based an economic efficiency analysis and from harmonisation of the imbalance settlement period which may be granted until 1 January 2030.

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European balancing energy platforms

European platform for the exchange of balancing energy from replacement reserves

By one year after the entry into force of this Regulation all Contracting Parties’ TSOs performing the reserve replacement and that have at least one interconnected neighbouring TSO performing the replacement reserves (RR) process shall use the European platform established in accordance with Article 19 of Regulation 2017/2195 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;

  • strive to fulfil all their needs for balancing energy from replacement reserves

European platform for the exchange of balancing energy from frequency restoration reserves with manual activation

By two years after the entry into force of this Regulation Contracting Parties’ TSOs shall use the European platform established in accordance with Article 20 of Regulation 2017/2195 (mFRR) 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;

  • strive to fulfil all their needs for balancing energy from the frequency restoration reserves with manual activation.

European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation

By two years after the entry into force of this Regulation all Contracting Parties’ TSOs performing the automatic frequency restoration process shall use the European platform established in accordance with Article 21 of Regulation 2017/2195 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;

  • strive to fulfil all their needs for balancing energy from the frequency restoration reserves with automatic activation.

European platform for imbalance netting process

By one year after the entry into force of this Regulation all Contracting Parties’ TSOs performing the automatic frequency restoration process shall use the European platform established in accordance with Article 22 of Regulation 2017/2195 to perform the imbalance netting process, at least for the Continental Europe synchronous area.

Balancing energy gate closure time

All TSOs shall harmonise the balancing energy gate closure time for standard products with the balancing energy gate closure time 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.

Requirements for standard products

Standard products for balancing energy shall be applied as part of the implementation of the European platforms. No later than the time when a Contracting Party’s TSO uses the respective European platform, the TSO shall use only standard and, where justified, specific balancing energy products.

By one year after entry into force of this Regulation, all TSOs shall apply the list of standard products for balancing capacity for frequency restoration reserves and replacement reserves adopted pursuant to Article 25 of Regulation 2017/2195.

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Balancing energy

Activation of balancing energy bids from common merit order list

In order to maintain the system's balance, each TSO shall use cost-effective balancing energy bids available for delivery in its control area based on common merit order lists or another model as applied pursuant to paragraph 2 of Article 5.

By one year after the entry into force of this Regulation, all TSOs shall apply the methodology for classifying the activation purposes of balancing energy bids adopted pursuant to Article 29(3) of Regulation (EU) 2017/2195.

The activation of balancing energy bids shall be based on a TSO-TSO model with a common merit order list.

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 apply the methodology adopted in accordance with Article 30 (1) and (5) of Regulation (EU) 2017/2195 to determine prices for the balancing energy that results from the activation of balancing energy bids for the frequency restoration process and the reserve replacement process.

Activation optimisation function

All TSOs shall apply the activation optimisation function established in accordance with Article 29 and Article 31 of Regulation (EU) 2017/2195 for the optimisation of the activation of balancing energy bids from different common merit order lists.

Common merit order lists shall consist of balancing energy bids from standard products. All TSOs shall establish the necessary common merit order lists for the standard products. Upward and downward balancing energy bids shall be separated in different common merit order lists.

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Balancing capacity

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. 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. 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.

Exchange of balancing capacity

Two or more TSOs exchanging or mutually willing to exchange balancing capacity shall develop a proposal for the establishment of common and harmonised rules and processes for the exchange and procurement 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;

  • the methodologies for allocating cross-zonal capacity to the balancing timeframe (co-optimised allocation, market-based allocation, allocation based on economic efficiency analysis)

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CZ capacity for balancing services

Cross-zonal capacity calculation

By five years after entry into force of this Regulation, all TSOs of a capacity calculation region shall develop a methodology for cross-zonal capacity calculation within the balancing timeframe for the exchange of balancing energy or for operating the imbalance netting process.

Before the implementation of this capacity calculation methodology, TSOs shall use the cross-zonal capacity remaining after the intraday cross-zonal gate closure time for these purposes.

Exchange of balancing capacity or sharing of reserves

Two or more TSOs may at their initiative or at the request of their relevant regulatory authorities set up a proposal for the application of one of the following processes:

  • co-optimised allocation process pursuant to Article 40 of Commission Regulation (EU) 2017/2195

  • market-based allocation process pursuant to Article 41 of Commission Regulation (EU) 2017/2195

  • allocation process based on economic efficiency analysis pursuant to Article 42 of Commission Regulation (EU) 2017/2195

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.

By one year after entry into force of this Regulation, all TSOs shall apply the harmonised methodology for the allocation process of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves per timeframe pursuant to Article 40 and, where relevant, pursuant to Articles 41 and 42 of Commission Regulation (EU) 2017/2195.

TSOs may allocate cross-zonal capacity for the exchange of balancing capacity or sharing of reserves only if cross-zonal capacity is calculated in accordance with the capacity calculation methodologies developed under CACM.

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Settlement

Settlement of the exchanges of energy between TSOs

By one year after the entry into force of this Regulation, all TSOs intentionally exchanging energy within the Continental Europe synchronous area shall apply the common TSO-TSO settlement rules for the intended exchanges of energy.

By one year after the entry into force of this Regulation, all TSOs of the Continental Europe synchronous area shall apply a common settlement rules applicable to all unintended exchanges of energy.

Imbalance settlement

By one year after entry into force of this Regulation, all TSOs shall apply the methodology on the harmonisation of the main features of imbalance settlement pursuant to Article 52(2) of Regulation (EU) 2017/2195.

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

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

  • 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:

  • 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.