ACER reports applying Network Code on gas balancing support short-term markets

08/04/2020

The European Union Agency for the Cooperation of Energy Regulators (ACER) publishes today the ACE​R report on enabling short-term gas markets after interim balancing measures (Fourth ACER Report on the implementation of the Balancing Network Code) with a view to end interim measures in the EU balancing zones. ACER has been reporting on the implementation of this Network Code since 2016.

The report finds that market-based balancing benefits network users and replaces the transmission system operator as the sole balancing agent. The Agency also reports that balancing data transparency helps imbalance price signals and imbalance trades to develop and that market-based balancing regimes support liquid short-term markets in the Union. ​

The Code envisaged full compliance from interim measures within five years from the entry into force, with the exception of balancing platforms (allowed until 16 April 2024). The Report follows up on whether the interim measures foreseen to expire by 16 April 2019 were completed.

 Main findings of the Report:​


What is the status of interim measures across Member States?

  • Germany, Lithuania, Poland, Romania, and Sweden have terminated the interim measures.
  • In some balancing zones interim measures continue:

- ​​Ireland has maintained imbalance tolerances.

- Greece and Slovakia have maintained balancing platforms, together with an interim imbalance charge.

- Bulgaria and Northern Ireland (UK) have kept more interim measures.

  • The countries not applying interim measures (Finland and Portugal) also need to progress their implementations of the Network Code further.

Overall, structural market limitations, the absence of proper implementation plans and late delivery caused a number of Member States to miss the Code's five-year deadline.

Where are the best practices found?

  • Best practices analysed in the report are found in Germany and Sweden, both showing high levels of compliance. 
  • The newly merged zone Estonia-Latvia also shows signs of high implementation potential.

What does ACER recommend?

Where concerns remain, the Agency recommends designing transparent and structured implementation processes. The Agency recommends the following measures:

  • To terminate outstanding interim measures, regulators are encouraged to:

- Remove tolerances as soon as possible and terminate balancing platforms possibly before the legal deadline of 16 April 2024.

- Create trading platforms where they are missing and reduce the role of balancing services to marginal amounts.

- Where liquidity is limited, explore balancing via neighbouring markets or a merger of balancing zones, based on existing EU ​examples.

  • ​To increase and reach the full compliance with the Code, the balancing zones should:​

​​- Prioritise trades with short-term standardised products without any legal restrictions or balancing services, as a remaining part of the old system.

- Improve national balancing rules through inclusive and open stakeholder consultation processes, and provide data transparency to support balancing trades.

- Identify missing implementation steps and progress on them.

- Consider that targeted regulation may apply to countries behind their implementation targets in the future, as proposed by the Agency in the Bridge Beyond 2025 Conclusion Paper.​


​Documents and additional information


ACER report on enabling short-term gas markets after interim balancing measures (Fourth ACER Report on the implementation of the Balancing Network Code)

Bridge Beyond 2025 Conclusion Paper

More on gas balancing rules