Enormous cost savings to be attained through balancing market
integration in South East Europe – study, 16 Feb 2015
The integration of
national electricity balancing markets in an efficient manner can provide
security of supply at the lowest cost and significantly enhance technical
performance and competition. An impact assessment study published lately demonstrates what steps need to be taken in the Energy Community
Contracting Parties to achieve an integrated regional balancing market in the
electricity sector.
The study also
quantifies the benefits to be gained in order to incentivise regulators and transmission
system operators to reform their balancing regimes and to correctly prioritise
the integration path taken.
The study revealed
that the annual savings for exemplary integration steps, which are in line with
the future Network Codes’ targets, are in the high double-digit millions of
Euros. For example, the annual saving potentials of 45 million Euros for the
control block comprising Serbia,
Kosovo*, Montenegro and Macedonia would be attained in case of a common
dimensioning and sharing of balancing reserves and the introduction of
imbalance netting.
Regulatory
prerequisites in process of establishment of the regional balancing market:
Strong regional cooperation of NRAs on drafting the rules of regional
balancing market and conditions for defining TSO-TSO contracts in process of
balancing market integration
Treatment of Value-Added Tax (VAT) and customs in cross border balancing
reserve and balancing energy exchange (payment obligations, possibilities to
implement reverse-charge mechanism for VAT, transiting countries, negative
price occurrence etc.)
Definition of instruments (bank guaranties, deposits) as payment
provision guaranties for inter-TSO trading in regional balancing market
Review and updating the existing transmission tariff methodologies by
treating the provision of balancing services as separate and explicit element
for compensation within tariff methodology
The introduction of an imbalance settlement mechanism for the balancing
market where the cost of imbalances are to be borne by the Balance Responsible
Parties that created them (balance responsibility)