S.2. Internal Energy Market

D.

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ACER adopts Decisions to establish a single EU electricity balancing market

Tuesday, January 28, 2020


ACER published three Decisions on the framework for the implementation of EU-wide electricity balancing trading platforms, which aims to integrate all national balancing markets into a single European electricity market. Out of ACER’s three Decisions, two directly govern the balancing of electricity from the mFRR and aFRR reserves while the third Decision establishes a harmonised methodology on the pricing of balancing energy.

Particularly noteworthy is the fact that TSOs will establish two common European trading platforms, which should allow all balancing energy offers to compete at EU level, thereby encouraging competition between EU Member States. Upward or downward balancing energy offers from balancing service providers in the EU will be available on these two platforms and all TSOs will be able to balance their national transmission networks by activating the cheapest available offers.

The harmonised methodology for balancing energy prices should support the establishment of these common platforms. Balancing energy offers traded through the platform will receive a marginal price equal to the price of the offer that balances the market. Currently, most TSOs use supply-price pricing.

Finally, the concept of a common balancing market should allow EU Member States to share the resources used by their respective TSOs, with the aim of ensuring equality of production and demand. Other targets include contributing to enhancing security of supply, limiting carbon emissions and reducing costs for customers.