© ICIS HEREN - ENTSO-E recommends two cross-border balancing models

The European electricity transmission association, ENTSO-E, has recommended two models for the cross-border balancing of electricity as part of a European electricity target plan.
The recommendations, outlined in ENTSO-E`s position paper on cross border balancing, published 8 July, will be discussed with other European stakeholders before being implemented by 2014.
ENTSO-E`s position is that three prerequisites must be met:

  • Cross-border balancing should preserve Europe`s electricity security of supply.
  • The model should integrate balancing mechanisms at a European level, and be consistent with other target models such as intra-day markets.
  • The responsibilities of each TSO in cross-border balancing schemes must be clearly and unambiguously established and understood.

The association concluded that two different models would be best to achieve the above objectives.
The first is that unused cross-border interconnector capacity should only be given back to the market if a tangible end user benefit can be demonstrated, as automatically handing back capacity currently creates extra work for TSOs.
This will involve creating a set of principles to measure market benefits, or "social welfare", to a particular market, ENTSO-E said.
The second ENTSO-E recommendation is that cross border exchanges of balancing energy take place between more than two TSOs, without a common merit order.
By doing this, TSOs can work directly with each other (either bilaterally or multilaterally) and cut out the balancing service provider "middleman". This model has been proven to result in greater exchanged volumes than a model with a balancing services provider, ENTSO-E said.
A cross-border balancing model is designed to support the other electricity target models currently in progress, such as the intra-day market model and the Day-ahead market model.
European stakeholders are invited to discuss the cross-border balancing model with ENTSO-E, and to come up with an agreed set of criteria for the model. This will then be implemented in 2014 as part of Europe`s electricity target model.
The target model in turn is designed to inform European decisions on framework guidelines and network codes.

(THE ICIS HEREN REPORTS - EDEM 15130 / 11 July 2011)

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