Imbalance Netting Cooperations

Abbreviation Explanation
ACE Area Control Error
Balancing or Imbalance Energy  Energy activated to compensate the imbalance of a Control Area
aFRR Automatic Frequency Restoration Reserve
IGCC International Grid Control Cooperation
INC Imbalance Netting Cooperation
LFC Load Frequency Control
TSO Transmission System Operator

One of the first responsibilities of a TSO is to ensure and maintain the physical balance between electricity generation and consumption in their respective control areas by using balancing energy. Substantial potential for efficiency can be exploited when the activation of balancing energy between different control areas is coordinated.

One possibility to optimise the activation is to net the demand for balancing energy between several control areas. Until January 2019, APG was part of two imbalance netting cooperations, which clearly shows the potential of such an optimisation: first, since 2014 APG is part of the IGCC, the continuous extension of which allowed APG to increase the overall imbalance netting potential; second, the INC was created and extended in 2013 and 2016, respectively, to cover the control areas of APG, the Slovenian TSO ELES, and the Croatian TSO HOPS. The INC was integrated into the IGCC in February 2019. This means that the IGCC now consists of a total of 13 active TSOs that can net opposing demands for aFRR and hence avoid its expensive activation. Additional TSOs will join by mid-2020 and the IGCC with its 23 active members will then evolve into the European Platform for Imbalance Netting (see Figure 1).

Both cooperations clearly demonstrate the potential of such an optimisation.

Figure 1: Principle – Cross-border optimisation through Imbalance Netting Cooperations

Technical description

In an imbalance netting cooperation the activation of aFRR is optimised by netting the aFRR demand of all participating control areas, striving for the best possible avoidance of counter activation. If aFRR needs to be activated in one control area in order to compensate for a lack of energy, and if at the same time aFRR needs to be activated in another participating control area to compensate for a surplus of energy, cross-border optimisation is executed before the activation of national aFRR.

The core element of each imbalance netting is the optimisation module, which is used before the activation of aFRR (see Figure 2). For this, the deviations (ACE) of each participating control area are submitted to the optimisation module. These signals are then netted in real time, considering additional restrictions and limitations. As a result of this netting process, individual correction signals are calculated and submitted to the respective grid control systems and their load frequency controllers.

Where a TSO participates in more than one imbalance netting cooperation, the resulting residual ACE is submitted to another netting module, which allows for additional optimisation steps in different imbalance netting cooperations. The optimisation as well as the data submission is performed within seconds.

 

Figure 2: Real-time model of data flows in an Imbalance Netting Cooperation

Limitations

The optimisation is constrained by the amount of free available transmission capacities after intraday gate closure of the common border of the participating CAs so as not to endanger the security of supply (see Figure 2). On the other hand, the optimisation can be limited manually, for example to the available and agreed amount of the automatic frequency restoration reserves of the participants, so the imbalance netting does not interact with energy markets other than the market for aFRR by its subsequent optimisation.

Economical background: opportunity and settlement prices

After the real-time optimisation the calculation of the settlement price and the TSO-TSO settlement of the cross-border exchanges takes place. The time unit of the settlement is 15 minutes. To achieve fair distribution of benefits, the financial settlement is performed via a settlement price model based on individual opportunity prices per TSO. The methodology for calculating the opportunity prices largely depends on the pricing model for aFRR in each control area and is therefore performed by each TSO individually.

  • APG determines the opportunity price per time unit (TU) based on volume-weighted average prices of activated aFRR, separately for imports and exports.

  • Further information on the opportunity prices of the participating TSOs in IGCC can be found here: https://www.entsoe.eu/network_codes/eb/imbalance-netting/

The settlement prices are calculated per time unit and, together with the exchanged volumes per TSO, form the basis for the settlement process.

  • The settlement prices are calculated in a fair and transparent manner for all participating TSOs. They are determined as the average of all TSOs’ opportunity prices, weighted by the respective exchanged volumes per TSO.

Within the IGCC an additional distribution of benefits resulting from the netting is exercised. In order to avoid negative benefits for single TSOs, the individual settlement prices are adjusted and the benefits of other TSOs are shortened by the same amount such that, ideally, there are no net losses for all partners. This set-up is designed to avoid systematic discrimination of any partner.


Publication of data


Close to real time

Similar to the publication regarding aFRR, the publication of the imbalance netting correction signals (increase or reduction activation of aFRR) takes place immediately after each 15-minute interval here. The components are displayed in different colours, separately for positive and negative activation, in the same graph. Also the data is provided via a CSV download.

Ex-post publication

The final correction signals and the settlement prices are published monthly (resolution: 15 minutes) on the APG's website here.