The EU Agency for the Cooperation of Energy Regulators (ACER) published today three decisions on the framework for implementation of EU-wide trading platforms for electricity balancing, which will effectively integrate all national balancing markets into one single EU electricity balancing market.
A common balancing market will allow EU Member States to share the resources used by their transmission system operators to make generation equal demand. This should help increase security of supply, limit carbon emissions and diminish costs to customers.
Two of the ACER decisions govern the electricity balancing from frequency restoration reserves with manual activation (mFRR) and with automatic activation (aFRR). A third decision establishes a harmonised methodology on pricing of balancing energy.
Following the ACER decisions, Transmission System Operators (TSOs) will establish two common European trading platforms that will enable all balancing energy bids to compete at EU level and thereby promote competition across EU Member States.
The bids for upward or downward balancing energy from balancing service providers across the EU will be available on these two platforms and all TSOs will be able to balance their national transmission systems by activating the cheapest bids available. This will enable TSOs to balance their systems in a more cost-efficient and secure way.
The harmonised methodology to price balancing energy will support the establishment of common platforms. All balancing energy bids traded through the platform will receive a marginal price equal to the price of the bid that clears the market. This is a significant step forward as currently most TSOs use pay-as-bid pricing. Marginal pricing provides efficient price signals for existing balancing service providers and for potential new investors.
You can access the Decisions here.