Balancing services markets are designed differently within each country of the ENTSO-E area. While some countries such as Germany tender all required balancing capacity products in daily auctions, other countries have been relying on obligations and secondary markets for some products. However, the path is clear, more and more European countries joining common markets to share balancing capacity and committing to new platforms for a cross-border exchange of balancing energy. Furthermore, the balancing service market becomes more and more liberalized and open for new providers such as aggregators. For instance, Belgium will fully join the FCR Cooperation from July 2020 onwards. That means that ELIA (Belgium TSO) procures its complete FCR demand together with several European TSOs and not any longer via local auctions as it is partly done now. The PICASSO project, which is about implementing a platform to exchange aFFR balancing energy between European TSOs is planned to go live in 2022. Moreover, Italy has created a pilot scheme (UVAM) which allows smaller units to be aggregated and their flexibility can be activated by TERNA (TSO in Italy) for balancing purposes.
The foundation for the harmonization was created through various European regulations and directives from the Clean Energy package for all Europeans and the electricity balancing guideline. These European laws were established and implemented in the recent years. However, the implementation road map by the TSOs, regulation authorities, market participants and other relevant stakeholder will take until the middle of this decade. The legislations provided a convenient starting point to share balancing resources among European TSOs, harmonize market design and initiate the opening of markets for new players. All these are important steps to a cost-efficient power system, which is capable of integrating a high share of renewables in Europe. However, harmonization, market opening and creation of a level playing field between different market participants within different countries is a very challenging task including various unsolved questions.
- ‘balancing market’ means the entirety of institutional, commercial and operational arrangements that establish market-based management of balancing;
- ‘balancing services’ means balancing energy or balancing capacity, or both;
- ‘balancing energy’ means energy used by TSOs to perform balancing and provided by a balancing service provider;
- ‘balancing capacity’ means a volume of reserve capacity that a balancing service provider has agreed to hold and in respect to which the balancing service provider has agreed to submit bids for a corresponding volume of balancing energy to the TSO for the duration of the contract;