Commission Regulation (EU) 2017/2195

of 23 November 2017

establishing a guideline on electricity balancing

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003(1) and in particular Articles 18(3)(b), 18(3)(d) and 18(5) thereof,

Whereas:

(1) A fully functioning and interconnected internal energy market is crucial for maintaining security of energy supply, increasing competitiveness and ensuring that all consumers can purchase energy at affordable prices.

(2) A well-functioning internal market in electricity should provide producers with appropriate incentives for investing in new power generation, including in electricity from renewable energy sources, paying special attention to the most isolated Member States and regions in the Union's energy market. A well-functioning market should also provide consumers with adequate measures to promote more efficient use of energy, which presupposes a secure supply of energy.

(3) Regulation (EC) No 714/2009 sets out non-discriminatory rules on conditions for access to the network for cross-border exchanges in electricity and, in particular, rules on capacity allocation for interconnections and transmission systems affecting cross-border electricity flows. In order to move towards a genuinely integrated electricity market and to ensure operational security, efficient balancing rules should be developed in order to provide incentives for market participants to contribute to solving the system scarcities for which they are responsible. In particular, it is necessary to set up rules related to the technical and operational aspects of system balancing and to energy trading. Such rules should include system-related power reserve rules.

(4) Commission Regulation (EU) 2017/1485(2) sets out harmonised rules on system operation applicable to transmission system operators (‘TSOs’), regional security coordinators, distribution system operators (‘DSOs’) and significant grid users. It identifies different critical system states (normal state, alert state, emergency state, blackout state and restoration state). It also sets out requirements and principles to maintain operational security throughout the Union and aims to promote the coordination of requirements and principles for Union-wide load-frequency-control and reserves.

(5) This Regulation establishes an EU-wide set of technical, operational and market rules to govern the functioning of electricity balancing markets. It sets out rules for the procurement of balancing capacity, the activation of balancing energy and the financial settlement of balance responsible parties. It also requires the development of harmonised methodologies for the allocation of cross-zonal transmission capacity for balancing purposes. Such rules will increase the liquidity of short-term markets by allowing for more cross-border trade and for a more efficient use of the existing grid for the purposes of balancing energy. As balancing energy bids will compete on EU-wide balancing platforms, it will also have positive effects on competition.

(6) This Regulation pursues the objective of ensuring the optimal management and coordinated operation of the European electricity transmission system, while supporting the achievement of the Union's targets for penetration of renewable generation, as well as providing benefits for customers. TSOs, working with DSOs where relevant, should be responsible for organising European balancing markets and should strive for their integration, keeping the system in balance in the most efficient manner. To do so, TSOs should work in close cooperation with one another and with DSOs, coordinating their activities as much as possible to deliver an efficient electricity system, across all regions and voltage levels, without prejudice to competition law.

(7) TSOs should be able to delegate all or part of any tasks under this Regulation to a third party. The delegating TSO should remain responsible for ensuring compliance with the obligations in this Regulation. Likewise Member States should be able to assign tasks and obligations under this Regulation to a third party. Such assignment should be limited to tasks and obligations executed at national level (such as imbalance settlement). The limitations to the assignment should not lead to unnecessary changes to the existing national arrangements. However TSOs should remain responsible for the tasks entrusted to them pursuant to Directive 2009/72/EC of the European Parliament and of the Council(3) for the development of European-wide methodologies, as well as the implementation and operation of the European-wide balancing platforms. Where, in a Member State, the expertise and experience of operating imbalance settlement lies with a third party, the TSO of the Member State may request the other TSOs and ENTSO-E to enable such third party to assist in the development of the proposal. However, the responsibility for developing the proposal remains with the TSO of the Member State in conjunction with all other TSOs and such responsibility cannot be transferred to a third party.

(8) The rules defining the role of balancing service providers and the role of balance responsible parties ensure a fair, transparent and non-discriminatory approach. Moreover, the rules concerning the terms and conditions related to balancing set out the principles and roles by which the balancing activities governed by this Regulation will take place, and ensure adequate competition based on a level-playing field between market participants, including demand-response aggregators and assets located at the distribution level.

(9) Each balancing service provider intending to provide balancing energy or balancing capacity should successfully pass a qualification process defined by the TSOs in close cooperation with DSOs where necessary.

(10) The integration of balancing energy markets should be facilitated with the establishment of common European platforms for operating the imbalance netting process and enabling the exchange of balancing energy from frequency restoration reserves and replacement reserves. Cooperation between TSOs should be strictly limited to what is necessary for the efficient and secure design, implementation and operation of those European platforms.

(11) The platforms for the exchange of balancing energy from frequency restoration reserves and replacement reserves should apply a model with merit order lists in order to ensure cost-efficient activation of bids. Only where a cost benefit analysis performed by all TSOs shows that the model for the platform for the exchange of balancing energy from frequency restoration reserves with automatic activation should be modified, it should be possible for TSOs to implement and make operational the platform based on another model.

(12) The integration of balancing energy markets should facilitate the efficient functioning of the intraday market in order to provide the possibility for market participants to balance themselves as close as possible to real time. Only the imbalances remaining after the end of the intraday market should be balanced by TSOs with the balancing market. The harmonisation of the imbalance settlement period to 15 minutes in Europe should support intraday trading and foster the development of a number of trading products with same delivery windows.

(13) In order to allow an exchange of balancing services, the creation of common merit order lists and adequate liquidity in the balancing market, it is necessary to regulate the standardisation of balancing products. This Regulation lists the minimum set of standard characteristics and additional characteristics defining standard products.

(14) The pricing method for standard products for balancing energy should create positive incentives for market participants in keeping and/or helping to restore the system balance of their imbalance price area, reduce system imbalances and costs for society. Such pricing approach should strive for an economically efficient use of demand response and other balancing resources subject to operational security limits. The pricing method used in the procurement of balancing capacity should strive for an economically efficient use of demand response and other balancing resources subject to operational security limits.

(15) In order to enable TSOs to procure and use balancing capacity in an efficient, economic and market-based manner, there is a need to foster market integration. In this regard, this Regulation establishes three methodologies through which TSOs may allocate cross-zonal capacity for the exchange of balancing capacity and sharing of reserves, when supported on the basis of a cost-benefit analysis: the co-optimisation process, the market-based allocation process and the allocation based on an economic efficiency analysis. The co-optimisationallocation process should be performed on a day-ahead basis whereas the market-based allocation process could be performed where the contracting is done not more than one week in advance of the provision of the balancing capacity and the allocation based on an economic efficiency analysis where the contracting is done more than one week in advance of the provision of the balancing capacity on the conditions that the volumes allocated are limited and that an assessment is done every year.

(16) Once a methodology for the allocation process of cross-zonal capacity is approved by the relevant regulatory authorities, early application of the methodology by two or more TSOs could take place to gain experience and allow for a smooth application by more TSOs in the future. The application of such a methodology, where existing, should nevertheless be harmonised by all TSOs in order to foster market integration.

(17) The general objective of imbalance settlement is to ensure that balance responsible parties support the system's balance in an efficient way and to incentivise market participants in keeping and/or helping to restore the system balance. This Regulation defines rules on imbalance settlement, ensuring that it is made in a non-discriminatory, fair, objective and transparent basis. To make balancing markets and the overall energy system fit for the integration of increasing shares of variable renewables, imbalance prices should reflect the real-time value of energy.

(18) A process for provisionally derogating TSOs from the application of certain rules should be set out in this Regulation to take into account circumstances where exceptionally, for example, compliance with those rules could lead to risks concerning operational security or lead to premature replacement of smart grid infrastructure.

(19) In accordance with Article 8 of Regulation (EC) No 713/2009 of the European Parliament and of the Council(4), the Agency for the Cooperation of Energy Regulators (‘the Agency’) should take a decision where the relevant regulatory authorities are not able to reach an agreement on common terms and conditions or methodologies.

(20) This Regulation has been developed in close cooperation with the Agency, the ENTSO for Electricity (‘ENTSO-E’) and stakeholders, in order to adopt effective, balanced and proportionate rules in a transparent and participative manner. In accordance with Article 18(3) of Regulation (EC) No 714/2009, the Commission will consult the Agency, ENTSO-E and other relevant stakeholders before proposing any amendment to this Regulation.

(21) The measures provided for in this Regulation are in accordance with the opinion of the Committee referred to in Article 23(1) of Regulation (EC) No 714/2009,

HAS ADOPTED THIS REGULATION:

TITLE IU.K. GENERAL PROVISIONS

Article 1U.K.Subject matter and scope

1.This Regulation lays down a detailed guideline on electricity balancing including the establishment of common principles for the procurement and the settlement of frequency containment reserves, frequency restoration reserves and replacement reserves and a common methodology for the activation of frequency restoration reserves and replacement reserves.

2.This Regulation shall apply to transmission system operators (‘TSOs’), distribution system operators (‘DSOs’) including closed distribution systems, [F1the regulatory authority] F2..., third parties to whom responsibilities have been delegated or assigned and other market participants.

3.This Regulation shall apply to all transmission systems and interconnections [F3within the jurisdiction of Great Britain] except the transmission systems on islands that are not connected with other transmission systems via interconnections.

4.[F4This Regulation shall apply to all TSOs in Great Britain.] Where a TSO does not have a function relevant to one or more obligations under this Regulation, [F5the Secretary of State or the regulatory authority] may provide that the responsibility to comply with those obligations is assigned to one or more specific TSOs.

5.Where a load-frequency control (‘LFC’) area consists of two or more TSOs, all TSOs of that LFC area may decide, subject to the approval by the relevant regulatory authorities, to exercise one or more obligations under this Regulation in a coordinated manner for all scheduling areas of the LFC area.

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8.This Regulation shall apply to all system states defined in Article 18 of Regulation (EU) 2017/1485.

Textual Amendments

Article 2U.K.Definitions

[F7Except where stated in this Article, for the purposes of this Regulation, the definitions in Article 2 of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast), Article 2 of Commission Regulation (EU) No 543/2013 and Article 3 of Commission Regulation (EU) 2017/1485 apply.]

The following definitions shall also apply:

(1)

‘balancing’ means all actions and processes, on all timelines, through which TSOs ensure, in a continuous way, the maintenance of system frequency within a predefined stability range as set out in Article 127 of Regulation (EU) 2017/1485, and compliance with the amount of reserves needed with respect to the required quality, as set out in Part IV Title V, Title VI and Title VII of Regulation (EU) 2017/1485;

(2)

‘balancing market’ means the entirety of institutional, commercial and operational arrangements that establish market-based management of balancing;

(3)

‘balancing services’ means balancing energy or balancing capacity, or both;

(4)

‘balancing energy’ means energy used by TSOs to perform balancing and provided by a balancing service provider;

(5)

‘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;

(6)

‘balancing service provider’ means a market participant with reserve-providing units or reserve-providing groups able to provide balancing services to TSOs;

(7)

‘balance responsible party’ means a market participant or its chosen representative responsible for its imbalances;

(8)

‘imbalance’ means an energy volume calculated for a balance responsible party and representing the difference between the allocated volume attributed to that balance responsible party and the final position of that balance responsible party, including any imbalance adjustment applied to that balance responsible party, within a given imbalance settlement period;

(9)

‘imbalance settlement’ means a financial settlement mechanism for charging or paying balance responsible parties for their imbalances;

(10)

‘imbalance settlement period’ means the time unit for which balance responsible parties' imbalance is calculated;

(11)

‘imbalance area’ means the area in which an imbalance is calculated;

(12)

‘imbalance price’ means the price, be it positive, zero or negative, in each imbalance settlement period for an imbalance in each direction;

(13)

‘imbalance price area’ means the area for the calculation of an imbalance price;

(14)

‘imbalance adjustment’ means an energy volume representing the balancing energy from a balancing service provider and applied by the connecting TSO for an imbalance settlement period to the concerned balance responsible parties, used for the calculation of the imbalance of these balance responsible parties;

(15)

‘allocated volume’ means an energy volume physically injected or withdrawn from the system and attributed to a balance responsible party, for the calculation of the imbalance of that balance responsible party;

(16)

‘position’ means the declared energy volume of a balance responsible party used for the calculation of its imbalance;

(17)

‘self-dispatching model’ means a scheduling and dispatching model where the generation schedules and consumption schedules as well as dispatching of power generating facilities and demand facilities are determined by the scheduling agents of those facilities;

(18)

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(19)

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(20)

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(21)

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(22)

‘connecting TSO’ means the TSO that operates the scheduling area in which balancing service providers and balance responsible parties shall be compliant with the terms and conditions related to balancing;

(23)

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(24)

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(25)

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(26)

‘transfer of balancing capacity’ means a transfer of balancing capacity from the initially contracted balancing service provider to another balancing service provider;

(27)

‘balancing energy gate closure time’ means the point in time when submission or update of a balancing energy bid F10... is no longer permitted;

(28)

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(29)

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(30)

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(31)

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(32)

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(33)

‘validity period’ means the period when the balancing energy bid offered by the balancing service provider can be activated, where all the characteristics of the product are respected. The validity period is defined by a start time and an end time;

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(36)

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(37)

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(38)

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(39)

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(40)

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(41)

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(42)

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(43)

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(44)

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(45)

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(46)

[F13“day-ahead market gate closure time” has the meaning given in Article 2 of Commission Regulation (EU) 2015/1222, as it applied in EU law immediately before IP completion day;

(47)

“day-ahead market time frame” has the meaning given in Article 2 of Commission Regulation (EU) 2015/1222, as it applied in EU law immediately before IP completion day;

(48)

“demand facility” has the meaning given in Article 2 of Commission Regulation (EU) 2016/1388, as it applied in EU law immediately before IP completion day;]

Textual Amendments

Article 3U.K.Objectives and regulatory aspects

1.This Regulation aims at:

(a)fostering effective competition, non-discrimination and transparency in balancing markets;

(b)enhancing efficiency of balancing as well as efficiency of F14... national balancing markets;

(c)integrating balancing markets and promoting the possibilities for exchanges of balancing services while contributing to operational security;

(d)contributing to the efficient long-term operation and development of the electricity transmission system and electricity sector F15... while facilitating the efficient and consistent functioning of day-ahead, intraday and balancing markets;

(e)ensuring that the procurement of balancing services is fair, objective, transparent and market-based, avoids undue barriers to entry for new entrants, fosters the liquidity of balancing markets while preventing undue [F16market distortions];

(f)facilitating the participation of demand response including aggregation facilities and energy storage while ensuring they compete with other balancing services at a level playing field and, where necessary, act independently when serving a single demand facility;

(g)facilitating the participation of renewable energy sources and [F17supporting the achievement of any target specified in an enactment for the share of energy from renewable sources].

2.When applying this Regulation, [F18the Secretary of State, the regulatory authority], and system operators shall:

(a)apply the principles of proportionality and non-discrimination;

(b)ensure transparency;

(c)apply the principle of optimisation between the highest overall efficiency and lowest total costs for all parties involved;

(d)ensure that TSOs make use of market-based mechanisms, as far as possible, in order to ensure network security and stability;

(e)ensure that the development of the forward, day-ahead and intraday markets is not compromised;

(f)respect the responsibility assigned to the relevant TSO in order to ensure system security, including as required by [F19any enactment];

(g)consult with relevant DSOs and take account of potential impacts on their system;

(h)take into consideration agreed F20... standards and technical specifications.

Textual Amendments

Article 4U.K.Terms and conditions or methodologies of TSOs

1.TSOs shall develop the terms and conditions or methodologies required by this Regulation and submit them for approval to the [F21regulatory authority] within the respective deadlines set out in this Regulation.

2.Where a proposal for terms and conditions or methodologies pursuant to this Regulation needs to be developed and agreed by more than one TSO, the participating TSOs shall closely cooperate. TSOs F22... shall regularly inform the [F23regulatory authority] about the progress of developing these terms and conditions or methodologies.

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Textual Amendments

Article 5U.K.Approval of terms and conditions or methodologies of TSOs

1.[F25The regulatory authority] shall approve the terms and conditions or methodologies developed by TSOs under [F26paragraph 4].

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4.The proposals for the following terms and conditions or methodologies shall be subject to approval by [F28the regulatory authority] F29... on a case-by-case basis:

(a)the exemption to publish information on offered prices of balancing energy or balancing capacity bids due to market abuse concerns pursuant to Article 12(4);

(b)where appropriate, the methodology for allocating costs resulting from actions taken by DSOs, pursuant to Article 15(3);

(c)the terms and conditions related to balancing pursuant to Article 18;

F30(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)the exemption to separate procurement of upward and downward balancing capacity pursuant to Article 32(3);

(g)where appropriate, the additional settlement mechanism separate from the imbalance settlement, to settle the procurement costs of balancing capacity, administrative costs and other costs related to balancing with balance responsible parties pursuant to Article 44(3);

(h)the derogations to one or more provisions of this Regulation pursuant to Article 62(2);

(i)the costs relating to the obligations imposed on system operators or assigned third entities in accordance with this Regulation pursuant to Article 8(1);

[F31(j)the exemption, for the geographical area in which the procurement of balancing capacity has taken place, from the requirement to allow balancing service providers to transfer their obligations to provide balancing capacity pursuant to Article 34(1);

(k)the exemption from the requirement to apply imbalance settlement periods of 15 minutes pursuant to Article 53(2);]

on which [F32the Secretary of State] may provide an opinion to the F33... regulatory authority.

5.The proposal for terms and conditions or methodologies shall include a proposed timescale for their implementation and a description of their expected impact on the objectives of this Regulation. The implementation timescale shall not be longer than 12 months after the approval by the [F34regulatory authority], except where [F35the regulatory authority agrees] to extend the implementation timescale or where different timescales are stipulated in this Regulation. F36...

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8.Any party may complain against a relevant system operator or TSO in relation to that system operator's or TSO's obligations or decisions under this Regulation and may refer the complaint to the relevant regulatory authority which, acting as dispute settlement authority, shall issue a decision within two months after receipt of the complaint. That period may be extended by a further two months where additional information is sought by the relevant regulatory authority. That extended period may be further extended with the agreement of the complainant. The relevant regulatory authority's decision shall be binding unless and until overruled on appeal.

Textual Amendments

Article 6U.K.Amendments to terms and conditions or methodologies of TSOs

1.Where [F38the regulatory authority requires] an amendment in order to approve the terms and conditions or methodologies submitted in accordance with [F39paragraph 4] of Article 5, the relevant TSOs shall submit a proposal for amended terms and conditions or methodologies for approval within two months following the requirement from the [F40regulatory authority]. The [F40regulatory authority] shall decide on the amended terms and conditions or methodologies within two months following their submission.

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3.TSOs responsible for developing a proposal for terms and conditions or methodologies or [F42the regulatory authority] F43... may request amendments of those terms and conditions or methodologies. The proposals for amendments to the terms and conditions or methodologies shall be submitted to consultation in accordance with the procedure set out in Article 10 and approved in accordance with the procedure set out in Article 4 and Article 5.

Textual Amendments

Article 7U.K.Publication of terms and conditions or methodologies on the internet

TSOs responsible for establishing the terms and conditions or methodologies in accordance with this Regulation shall publish them on the internet following approval by the [F44regulatory authority] or, where no such approval is required, following their establishment, except where such information is considered as confidential in accordance with Article 11.

Textual Amendments

Article 8U.K.Recovery of costs

1.Costs related to the obligations imposed on system operators or assigned third entities in accordance with this Regulation shall be assessed by the [F45regulatory authority].

2.Costs considered as reasonable, efficient, and proportionate by the [F46regulatory authority] shall be recovered through network tariffs or other appropriate mechanisms as determined by the [F46regulatory authority].

3.If requested by the [F47regulatory authority], system operators or assigned entities shall, within three months of the request, provide the information necessary to facilitate the assessment of the costs incurred.

4.Any costs incurred by market participants in meeting the requirements of this Regulation shall be borne by those market participants.

Textual Amendments

Article 9U.K.Stakeholder involvement

The [F48 F49... transmission system operator], shall organise stakeholder involvement regarding the balancing market and other aspects of the implementation of this Regulation. Such involvement shall include regular meetings with stakeholders to identify problems and propose improvements related to the integration of the balancing market.

Textual Amendments

Article 10U.K.Public consultation

1.TSOs responsible for submitting proposals for terms and conditions or methodologies or their amendments in accordance with this Regulation shall consult stakeholders, including the [F50regulatory authority], on the draft proposals for terms and conditions or methodologies and other implementing measures for a period of not less than one month.

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5.At least the proposals pursuant to points (a), (b), (c), (d), (e), (f), (g) [F52, (i), (j) and (k)] of Article 5(4) shall be subject to public consultation F53....

6.TSOs responsible for the proposal for terms and conditions or methodologies shall duly consider the views of stakeholders resulting from the consultations undertaken in accordance with [F54paragraph 5], prior to its submission for regulatory approval. In all cases, a sound justification for including or not including the views resulting from the consultation shall be provided together with the submission and published in a timely manner before or simultaneously with the publication of the proposal for terms and conditions or methodologies.

Textual Amendments

Article 11U.K.Confidentiality obligations

1.Any confidential information received, exchanged or transmitted pursuant to this Regulation shall be subject to the conditions of professional secrecy laid down in paragraphs 2, 3 and 4.

2.The obligation of professional secrecy shall apply to any person subject to the provisions of this Regulation.

3.Confidential information received by the persons or regulatory authorities referred to in paragraph 2 in the course of their duties may not be divulged to any other person or authority, without prejudice to cases covered by F55... the other provisions of this Regulation or [F56any other enactment].

4.Without prejudice to cases covered by [F57any other enactment], [F58the regulatory authority], bodies or persons who receive confidential information pursuant to this Regulation may use it only for the purpose of carrying out their duties under this regulation, except where written consent has been provided by the primary owner of the data.

Textual Amendments

Article 12U.K.Publication of information

1.All entities referred to in Article 1( 2) shall provide TSOs with all the relevant information to fulfil their obligations laid down in paragraphs 3 to 5.

2.All entities referred to in Article 1( 2) shall ensure that information in paragraphs 3 to 5 is published at a time and in a format that does not create an actual or potential competitive advantage or disadvantage to any individual or companies.

3.Each TSO shall publish the following information as soon as it becomes available:

(a)information on the current system balance of its scheduling area or scheduling areas, as soon as possible but no later than 30 minutes after real-time;

(b)information on all balancing energy bids from its scheduling area or scheduling areas, anonymised where necessary, no later than 30 min after the end of the relevant market time unit. The information shall include:

(i)

type of product;

(ii)

validity period;

(iii)

offered volumes;

(iv)

offered prices;

(v)

information on whether the bid was declared as unavailable;

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(e)aggregated information on balancing energy bids no later than 30 min after the end of the relevant market time unit, which shall include:

(i)

total volume of offered balancing energy bids;

(ii)

total volume of offered balancing energy bids separately per type of reserves;

(iii)

total volume of offered and activated balancing energy bids F60...;

(iv)

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(f)information on offered volumes as well as offered prices of procured balancing capacity, anonymised where necessary, no later than one hour after the results of the procurement have been notified to the bidders;

(g)the initial terms and conditions related to balancing referred to in Article 18 at least one month before the application and any amendments to the terms and conditions immediately following approval by the [F62regulatory authority];

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4.Subject to approval pursuant to Article 18, a TSO may withhold the publication of information on offered prices and volumes of balancing capacity or balancing energy bids if justified for reasons of market abuse concerns and if not detrimental to the effective functioning of the electricity markets. A TSO shall report such withholdings at least once a year to the relevant [F64regulatory authority].

5.No later than two years after entry into force of this Regulation, each TSO shall publish the information pursuant to paragraph 3 in a commonly agreed harmonised format F65....

Textual Amendments

Article 13U.K.Delegation and assignment of tasks

1.A TSO may delegate all or part of any tasks with which it is entrusted under this Regulation to one or more third parties in case the third party can carry out the respective function at least as effectively as the delegating TSO. The delegating TSO shall remain responsible for ensuring compliance with the obligations under this Regulation, including ensuring access to information necessary for monitoring by the [F66regulatory authority].

2.Prior to the delegation, the third party concerned shall demonstrate to the delegating TSO its ability to meet the tasks to be delegated.

3.In the event that all or part of any tasks specified in this Regulation are delegated to a third party, the delegating TSO shall ensure that suitable confidentiality agreements in accordance with the confidentiality obligations of the delegating TSO have been put in place prior to the delegation. After delegating all or part of any tasks to a third party, the delegating TSO must inform the F67... regulatory authority and publish this decision on the internet.

4.Without prejudice to the tasks entrusted to TSOs pursuant to Directive 2009/72/EC [F68as it applied immediately before IP completion day], [F69the Secretary of State], or where applicable [F70the] regulatory authority, may assign tasks or obligations entrusted to TSOs under this Regulation to one or more third parties. F71... Prior to the assignment, the third party concerned shall demonstrate to the [F72Secretary of State], or where applicable the F73... regulatory authority, its ability to meet the task to be assigned.

5.In the event that tasks and obligations are assigned to a third party by [F74the Secretary of State or the regulatory authority], references to TSO in this Regulation shall be understood as referring to the assigned entity. The F75... regulatory authority shall ensure regulatory oversight of the assigned entity in respect of the assigned tasks and obligations.

Textual Amendments

TITLE IIU.K. ELECTRICITY BALANCING MARKET

CHAPTER 1 U.K. Functions and responsibilities

Article 14U.K.Role of the TSOs

1.Each TSO shall be responsible for procuring balancing services from balancing service providers in order to ensure operational security.

2.Each TSO shall apply a self-dispatching model for determining generation schedules and consumption schedules. F76...

Textual Amendments

Article 15U.K.Cooperation with DSOs

1.DSOs, TSOs, balancing service providers and balance responsible parties shall cooperate in order to ensure efficient and effective balancing.

2.Each DSO shall provide, in due time, all necessary information in order to perform the imbalance settlement to the connecting TSO in accordance with the terms and conditions related to balancing pursuant to Article 18.

3.Each TSO may, together with the reserve connecting DSOs within the TSO's control area, jointly elaborate a methodology for allocating costs resulting from actions of DSOs pursuant to paragraphs 4 and 5 of Article 182 of Regulation (EU) 2017/1485. The methodology shall provide for a fair allocation of costs taking into account the responsibilities of the parties involved.

4.DSOs shall report to the connecting TSO any limits defined pursuant to paragraphs 4 and 5 of Article 182 of Regulation (EU) 2017/1485 that could affect the requirements set out in this Regulation.

Article 16U.K.Role of balancing service providers

1.A balancing service provider shall qualify for providing bids for balancing energy or balancing capacity which are activated or procured by the connecting TSO F77.... Successful completion of the prequalification, ensured by the connecting TSO and processed pursuant to Article 159 and Article 162 of Regulation (EU) 2017/1485 shall be considered as a prerequisite for the successful completion of the qualification process to become a balancing service provider pursuant to this Regulation.

2.Each balancing service provider shall submit to the connecting TSO its balancing capacity bids that affect one or more balance responsible parties.

3.Each balancing service provider participating in the procurement process for balancing capacity shall submit and have the right to update its balancing capacity bids before the gate closure time of the procurement process.

4.Each balancing service provider with a contract for balancing capacity shall submit to its connecting TSO the balancing energy bids F78... corresponding to the volume, products, and other requirements set out in the balancing capacity contract.

5.Any balancing service provider shall have the right to submit to its connecting TSO the balancing energy bids F79... for which it has passed the prequalification process pursuant to Article 159 and Article 162 of Regulation (EU) 2017/1485.

6.The price of the balancing energy bids F80... pursuant to paragraph 4 shall not be predetermined in a contract for balancing capacity. A TSO may propose an exemption to this rule in the proposal for the terms and conditions related to balancing set-up pursuant to Article 18. Such an exemption shall F81... be accompanied with a justification demonstrating higher economic efficiency.

7.There shall be no discrimination between balancing energy bids F82... submitted pursuant to paragraph 4 and balancing energy bids F82... submitted pursuant to paragraph 5.

8.For each product for balancing energy or balancing capacity, the reserve providing unit, the reserve providing group, the demand facility or the third party and the associated balance responsible parties pursuant to Article 18(4)(d), shall belong to the same scheduling area.

Textual Amendments

Article 17U.K.Role of balance responsible parties

1.In real time, each balance responsible party shall strive to be balanced or help the power system to be balanced. The detailed requirements concerning this obligation shall be defined in the proposal for terms and conditions related to balancing set up pursuant to Article 18.

2.Each balance responsible party shall be financially responsible for the imbalances to be settled with the connecting TSO.

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Textual Amendments

Article 18U.K.Terms and conditions related to balancing

1.No later than six months after entry into force of this Regulation [F84TSOs] shall develop a proposal regarding:

(a)the terms and conditions for balancing service providers;

(b)the terms and conditions for balance responsible parties.

Where a LFC area consists of two or more TSOs, all TSOs of that LFC area may develop a common proposal subject to the approval by the [F85regulatory authority].

2.The terms and conditions pursuant to paragraph 1 shall also include the rules for suspension and restoration of market activities pursuant to Article 36 of Regulation (EU) 2017/2196 and rules for settlement in case of market suspension pursuant to Article 39 of Regulation (EU) 2017/2196 once approved in accordance with Article 4 of Regulation (EU) 2017/2196.

3.When developing proposals for terms and conditions for balancing service providers and balance responsible parties, each TSO shall:

(a)coordinate with the TSOs and DSOs that may be affected by those terms and conditions;

F86(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)involve other DSOs and other stakeholders throughout the development of the proposal and take into account their views without prejudice to public consultation pursuant to Article 10.

4.The terms and conditions for balancing service providers shall:

(a)define reasonable and justified requirements for the provisions of balancing services;

(b)allow the aggregation of demand facilities, energy storage facilities and power generating facilities in a scheduling area to offer balancing services subject to conditions referred to in paragraph 5 (c);

(c)allow demand facility owners, third parties and owners of power generating facilities from conventional and renewable energy sources as well as owners of energy storage units to become balancing service providers;

(d)require that each balancing energy bid from a balancing service provider is assigned to one or more balance responsible parties to enable the calculation of an imbalance adjustment pursuant to Article 49.

5.The terms and conditions for balancing service providers shall contain:

(a)the rules for the qualification process to become a balancing service provider pursuant to Article 16;

(b)the rules, requirements and timescales for the procurement and transfer of balancing capacity pursuant to Articles 32 F87... and 34;

(c)the rules and conditions for the aggregation of demand facilities, energy storage facilities and power generating facilities in a scheduling area to become a balancing service provider;

(d)the requirements on data and information to be delivered to the connecting TSO and, where relevant, to the reserve connecting DSO during the prequalification process and operation of the balancing market;

(e)the rules and conditions for the assignment of each balancing energy bid from a balancing service provider to one or more balance responsible parties pursuant to paragraph 4 (d);

(f)the requirements on data and information to be delivered to the connecting TSO and, where relevant, to the reserve connecting DSO to evaluate the provisions of balancing services pursuant to Article 154(1), Article 154(8), Article 158(1)(e), Article 158(4)(b), Article 161(1)(f) and Article 161(4)(b) of Regulation (EU) 2017/1485;

(g)the definition of a location for each [F88balancing] product taking into account paragraph 5 (c);

(h)the rules for the determination of the volume of balancing energy to be settled with the balancing service provider pursuant to Article 45;

(i)the rules for the settlement of balancing service providers defined pursuant to Chapters 2 and 5 of Title V;

(j)a maximum period for the finalisation of the settlement of balancing energy with a balancing service provider in accordance with Article 45, for any given imbalance settlement period;

(k)the consequences in case of non-compliance with the terms and conditions applicable to balancing service providers.

6.The terms and conditions for balance responsible parties shall contain:

(a)the definition of balance responsibility for each connection in a way that avoids any gaps or overlaps in the balance responsibility of different market participants providing services to that connection;

(b)the requirements for becoming a balance responsible party;

(c)the requirement that all balance responsible parties shall be financially responsible for their imbalances, and that the imbalances shall be settled with the connecting TSO;

(d)the requirements on data and information to be delivered to the connecting TSO to calculate the imbalances;

(e)the rules for balance responsible parties to change their schedules prior to and after the intraday energy gate closure time pursuant to [F89paragraph 4] of Article 17;

(f)the rules for the settlement of balance responsible parties defined pursuant to Chapter 4 of Title V;

(g)the delineation of an imbalance area pursuant to Article 54(2) and an imbalance price area;

(h)a maximum period for the finalisation of the settlement of imbalances with balance responsible parties for any given imbalance settlement period pursuant to Article 54;

(i)the consequences in case of non-compliance with the terms and conditions applicable to balance responsible parties;

(j)an obligation for balance responsible parties to submit to the connecting TSO any modifications of the position;

(k)the settlement rules pursuant to Articles 52, 53, 54 and 55;

(l)where existing, the provisions for the exclusion of imbalances from the imbalance settlement when they are associated with the introduction of ramping restrictions for the alleviation of deterministic frequency deviations pursuant to Article 137(4) of Regulation (EU) 2017/1485.

7.Each connecting TSO may include the following elements in the proposal for the terms and conditions for balancing service providers or in the terms and conditions for balance responsible parties:

F90(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)where justified, a requirement for balancing service providers to offer the unused generation capacity or other balancing resources through balancing energy bids F91... in the balancing markets after day ahead market gate closure time, without prejudice to the possibility of balancing service providers to change their balancing energy bids prior to the balancing energy gate closure time F92... due to trading within intraday market;

F93(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)specific requirements with regard to the position of balance responsible parties submitted after the day-ahead market timeframe to ensure that the sum of their internal and external commercial trade schedules equals the sum of the physical generation and consumption schedules, taking into account electrical losses compensation, where relevant;

(e)an exemption to publish information on offered prices of balancing energy or balancing capacity bids due to market abuse concerns pursuant to Article 12(4);

(f)an exemption F94... to predetermine the price of the balancing energy bids from a balancing capacity contract pursuant to Article 16(6);

(g)an application for the use of dual pricing for all imbalances [F95containing the information set out in Article 52(2)(d)(i) and (ii)].

F968.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.Each TSO shall monitor the fulfilment by all parties of the requirements set out in the terms and conditions for balancing within its scheduling area or scheduling areas.

Textual Amendments

CHAPTER 2U.K.[F97Failure of the procurement of balancing services]

F98Article 19U.K.European platform for the exchange of balancing energy from replacement reserves

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Textual Amendments

F98Article 20U.K.European platform for the exchange of balancing energy from frequency restoration reserves with manual activation

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Textual Amendments

F98Article 21U.K.European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation

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Textual Amendments

F98Article 22U.K.European platform for imbalance netting process

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Textual Amendments

F98Article 23U.K.Cost sharing between TSOs in different Member States

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Textual Amendments

F98Article 24U.K.Balancing energy gate closure time

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Textual Amendments

F98Article 25U.K.Requirements for standard products

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Textual Amendments

F98Article 26U.K.Requirements for specific products

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Textual Amendments

F98Article 27U.K.Conversion of bids in a central dispatching model

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Textual Amendments

Article 28U.K.Fall-back procedures

1.Each TSO shall ensure that fall-back solutions are in place in case [F99the procedure referred to in paragraph 2 fails].

2.Where the procurement of balancing services fails, the concerned TSOs shall repeat the procurement process. TSOs shall inform market participants that fall-back procedures will be used as soon as possible.

F1003.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Textual Amendments

TITLE IIIU.K.PROCUREMENT OF BALANCING SERVICES

F101CHAPTER 1U.K.Balancing energy

F101Article 29U.K.Activation of balancing energy bids from common merit order list

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F101Article 30U.K.Pricing for balancing energy and cross-zonal capacity used for exchange of balancing energy or for operating the imbalance netting process

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Article 31U.K.F101Activation optimisation function

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Textual Amendments

CHAPTER 2U.K.Balancing capacity

Article 32U.K.Procurement rules

1.All TSOs of the LFC block shall regularly and at least once a year review and define the reserve capacity requirements for the LFC block or scheduling areas of the LFC block pursuant to dimensioning rules as referred in Articles 127, 157 and 160 of Regulation (EU) 2017/1485. Each TSO shall perform an analysis on optimal provision of reserve capacity aiming at minimisation of costs associated with the provision of reserve capacity. This analysis shall take into account the following options for the provision of reserve capacity:

(a)procurement of balancing capacity within control area F102..., when applicable;

(b)sharing of reserves, when applicable;

(c)the volume of non-contracted balancing energy bids which are expected to be available F103... within their control area F104....

2.Each TSO procuring balancing capacity shall define the rules for the procurement of balancing capacity in the proposal for the terms and conditions related to balancing service providers developed pursuant to Article 18. The rules for the procurement of balancing capacity shall comply with the following principles:

(a)the procurement method shall be market-based for at least the frequency restoration reserves and the replacement reserves;

(b)the procurement process shall be performed on a short-term basis to the extent possible and where economically efficient;

(c)the contracted volume may be divided into several contracting periods.

3.The procurement of upward and downward balancing capacity for at least the frequency restoration reserves and the replacement reserves shall be carried out separately. Each TSO may submit a proposal to the [F105regulatory authority] requesting the exemption to this requirement. The proposal for exemption shall include:

(a)specification of the time period during which the exemption would apply;

(b)specification of the volume of balancing capacity for which the exemption would apply;

(c)analysis of the impact of such an exemption on the participation of [F106demand facility owners, third parties and owners of power generating facilities from renewable energy sources as well as owners of energy storage units];

(d)justification for the exemption demonstrating that such an exemption would lead to higher economic efficiency.

Textual Amendments

F107Article 33U.K.Exchange of balancing capacity

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Textual Amendments

Article 34U.K.Transfer of balancing capacity

1.Within the geographical area in which the procurement of balancing capacity has taken place, the TSOs shall allow balancing service providers to transfer their obligations to provide balancing capacity. The concerned TSO or TSOs may request an exemption where contracting periods for balancing capacity pursuant to Article 32(2)(b) are strictly less than one week.

2.The transfer of balancing capacity shall be allowed at least until one hour before the start of the delivery day.

3.The transfer of balancing capacity shall be allowed if the following conditions are met:

(a)the receiving balancing service provider has passed the qualification process for the balancing capacity for which the transfer is performed;

(b)the transfer of balancing capacity is not expected to endanger operational security;

(c)the transfer of balancing capacity does not exceed the operational limits set out in [F108Chapter 1] of Part IV Title VIII of Regulation (EU) 2017/1485.

F1094.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.If a TSO does not allow the transfer of balancing capacity, the concerned TSO shall explain the reason for the rejection to the balancing service providers involved.

Textual Amendments

F110CHAPTER 3U.K.TSO-BSP model

F110Article 35U.K.Exchange of balancing services

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Textual Amendments

F111TITLE IVU.K.CROSS-ZONAL CAPACITY FOR BALANCING SERVICES

CHAPTER 1U.K.Exchange of balancing energy or imbalance netting process

F111Article 36U.K.Use of cross-zonal capacity

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F111Article 37U.K.Cross-zonal capacity calculation

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CHAPTER 2U.K.Exchange of balancing capacity or sharing of reserves

F111Article 38U.K.General requirements

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F111Article 39U.K.Calculation of market value of cross-zonal capacity

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F111Article 40U.K.Co-optimised allocation process

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F111Article 41U.K.Market-based allocation process

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F111Article 42U.K.Allocation process based on economic efficiency analysis

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F111Article 43U.K.Use of cross-zonal capacity by balancing service providers

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Textual Amendments

TITLE VU.K. SETTLEMENT

CHAPTER 1 U.K. Settlement principles

Article 44U.K.General principles

1.The settlement processes shall:

(a)establish adequate economic signals which reflect the imbalance situation;

(b)ensure that imbalances are settled at a price that reflects the real time value of energy;

(c)provide incentives to balance responsible parties to be in balance or help the system to restore its balance;

F112(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)provide incentives to TSOs to fulfil their obligations pursuant to Article 127, Article 153, Article 157 and Article 160 of Regulation (EU) 2017/1485;

(f)avoid distorting incentives to balance responsible parties, balancing service providers and TSOs;

(g)support competition among market participants;

(h)provide incentives to balancing service providers to offer and deliver balancing services to the connecting TSO;

(i)ensure the financial neutrality of all TSOs.

2.[F113The regulatory authority] shall ensure that all TSOs under its competence do not incur economic gains or losses with regard to the financial outcome of the settlement pursuant to [F114Chapters 2 and 4] of this Title, over the regulatory period as defined by [F115the regulatory authority], and shall ensure that any positive or negative financial outcome as a result of the settlement pursuant to [F114Chapters 2 and 4] of this Title shall be passed on to network users in accordance with the applicable national rules.

3.Each TSO may develop a proposal for an additional settlement mechanism separate from the imbalance settlement, to settle the procurement costs of balancing capacity pursuant to Chapter 5 of this Title, administrative costs and other costs related to balancing. The additional settlement mechanism shall apply to balance responsible parties. This should be preferably achieved with the introduction of a shortage pricing function. If TSOs choose another mechanism, they should justify this in the proposal. Such a proposal shall be subject to approval by the F116... regulatory authority.

4.Each injection or withdrawal into or from a scheduling area of a TSO shall either be settled in accordance with F117... Chapter 4 of Title V.

Textual Amendments

CHAPTER 2 U.K. Settlement of balancing energy

Article 45U.K.Balancing energy calculation

1.As regards the settlement of balancing energy for at least the frequency restoration process and the reserve replacement process, each TSO shall establish a procedure for:

(a)the calculation of the activated volume of balancing energy based on requested or metered activation;

(b)claiming the recalculation of the activated volume of balancing energy.

2.Each TSO shall calculate the activated volume of balancing energy according to the procedures pursuant to paragraph 1(a) at least for:

(a)each imbalance settlement period;

(b)its imbalance areas;

(c)each direction, with a negative sign indicating relative withdrawal by the balancing service provider, and a positive sign indicating relative injection by the balancing service provider.

3.Each connecting TSO shall settle all activated volumes of balancing energy calculated pursuant to paragraph 2, with the concerned balancing service providers.

Article 46U.K.Balancing energy for frequency containment process

1.Each connecting TSO may calculate and settle the activated volume of balancing energy for the frequency containment process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45.

2.The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency containment process shall be defined for each direction as defined in Table 1:

Table 1

Payment for balancing energy

Balancing energy price positiveBalancing energy price negative
Positive balancing energyPayment from TSO to BSPPayment from BSP to TSO
Negative balancing energyPayment from BSP to TSOPayment from TSO to BSP

Article 47U.K.Balancing energy for frequency restoration process

1.Each connecting TSO shall calculate and settle the activated volume of balancing energy for the frequency restoration process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45

2.The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency restoration process shall be defined for each direction F118... as defined in the Table 1.

Textual Amendments

Article 48U.K.Balancing energy for reserve replacement process

1.Each connecting TSO shall calculate and settle the activated volume of balancing energy for the reserve replacement process with balancing service providers pursuant to paragraphs 1 and 2 of Article 45.

2.The price, be it positive, zero or negative, of the activated volume of balancing energy for reserve replacement process shall be defined for each direction F119... as defined in the Table 1.

Textual Amendments

Article 49U.K.Imbalance adjustment to the balance responsible party

1.Each TSO shall calculate an imbalance adjustment to be applied to the concerned balance responsible parties for each activated balancing energy bid.

2.For imbalance areas where several final positions for a single balance responsible party are calculated pursuant to Article 54(3), an imbalance adjustment may be calculated for each position.

3.For each imbalance adjustment, each TSO shall determine the activated volume of balancing energy calculated pursuant to Article 45 and any volume activated for purposes other than balancing.

F120CHAPTER 3U.K.Settlement of the exchanges of energy between TSOs

F120Article 50U.K.Intended exchanges of energy

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F120Article 51U.K.Unintended exchanges of energy

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Textual Amendments

CHAPTER 4 U.K. Imbalance settlement

Article 52U.K.Imbalance settlement

1.Each TSO or, where relevant, third party shall settle within its scheduling area or scheduling areas when appropriate with each balance responsible party for each imbalance settlement period pursuant to Article 53 all calculated imbalances pursuant to Article 49 and Article 54 against the appropriate imbalance price calculated pursuant to Article 55.

2.By one year after entry into force of this Regulation, all TSOs shall develop a proposal to further specify F121... at least:

(a)the calculation of an imbalance adjustment pursuant to Article 49 and the calculation of a position, an imbalance and an allocated volume following one of the approaches pursuant to Article 54(3);

(b)the main components used for the calculation of the imbalance price for all imbalances pursuant to Article 55 including, where appropriate, the definition of the value of avoided activation of balancing energy from frequency restoration reserves or replacement reserves;

(c)the use of single imbalance pricing for all imbalances pursuant to Article 55, which defines a single price for positive imbalances and negative imbalances for each imbalance price area within an imbalance settlement period; and

(d)the definition of conditions and methodology for applying dual imbalance pricing for all imbalances pursuant to Article 55, which defines one price for positive imbalances and one price for negative imbalances for each imbalance price area within an imbalance settlement period, encompassing:

(i)

conditions on when a TSO may propose to [F122the] regulatory authority F123... the application of dual pricing and which justification must be provided;

(ii)

the methodology for applying dual pricing.

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4.The proposal pursuant to paragraph 2 shall provide an implementation date no later than eighteen months after approval by [F125the regulatory authority].

Textual Amendments

Article 53U.K.Imbalance settlement period

1.By three years after the entry into force of this Regulation, all TSOs shall apply the imbalance settlement period of 15 minutes in all scheduling areas while ensuring that all boundaries of market time unit shall coincide with boundaries of the imbalance settlement period.

2.The TSOs of [F126the GB] synchronous area may jointly request an exemption from the requirement laid down in paragraph 1.

[F1273.The regulatory authority may grant an exemption from the requirement laid down in paragraph 1—

(a)upon a request under paragraph 2; or

(b)on its own initiative.]

Textual Amendments

Article 54U.K.Imbalance calculation

1.Each TSO shall calculate within its scheduling area or scheduling areas when appropriate the final position, the allocated volume, the imbalance adjustment and the imbalance:

(a)for each balance responsible party;

(b)for each imbalance settlement period;

(c)in each imbalance area.

2.The imbalance area shall be equal to the scheduling area F128....

3.Until the implementation of the proposal pursuant to Article 52(2), each TSO shall calculate the final position of a balance responsible party using one of the following approaches:

(a)balance responsible party has one single final position equal to the sum of its external commercial trade schedules and internal commercial trade schedules;

(b)balance responsible party has two final positions: the first is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from generation, and the second is equal to the sum of its external commercial trade schedules and internal commercial trade schedules from consumption;

F129(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.Each TSO shall set up the rules for:

(a)the calculation of the final position;

(b)the determination of the allocated volume;

(c)the determination of the imbalance adjustment pursuant to Article 49;

(d)the calculation of the imbalance;

(e)claiming the recalculation of the imbalance by a balance responsible party.

5.Allocated volume shall not be calculated for a balance responsible party which does not cover injections or withdrawals.

6.An imbalance shall indicate the size and the direction of the settlement transaction between the balance responsible party and the TSO; an imbalance can have alternatively:

(a)a negative sign, indicating a balance responsible party's shortage;

(b)a positive sign, indicating a balance responsible party's surplus.

Textual Amendments

Article 55U.K.Imbalance price

1.Each TSO shall set up rules to calculate the imbalance price, which can be positive, zero or negative, as defined in Table 2:

Table 2

Payment for imbalance

Imbalance price positiveImbalance price negative
Positive imbalancePayment from TSO to BRPPayment from BRP to TSO
Negative imbalancePayment from BRP to TSOPayment from TSO to BRP

2.The rules pursuant to paragraph 1 shall include a definition of the value of avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

3.Each TSO shall determine the imbalance price for:

(a)each imbalance settlement period;

(b)its imbalance price areas;

(c)each imbalance direction.

4.The imbalance price for negative imbalance shall not be less than, alternatively:

(a)the weighted average price for positive activated balancing energy from frequency restoration reserves and replacement reserves;

(b)in the event that no activation of balancing energy in either direction has occurred during the imbalance settlement period, the value of the avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

5.The imbalance price for positive imbalance shall not be greater than, alternatively:

(a)the weighted average price for negative activated balancing energy from frequency restoration reserves and replacement reserves;

(b)in the event that no activation of balancing energy in either direction has occurred during the imbalance settlement period, the value of the avoided activation of balancing energy from frequency restoration reserves or replacement reserves.

6.In the event that both positive and negative balancing energy from frequency restoration reserves or replacement reserves have been activated during the same imbalance settlement period, the imbalance settlement price shall be determined for positive imbalance and negative imbalance based on at least one of the principles pursuant to paragraphs 4 and 5.

CHAPTER 5 U.K. Settlement of balancing capacity

Article 56U.K.Procurement within a scheduling area

1.Each TSO of a scheduling area using balancing capacity bids shall establish rules for the settlement of at least frequency restoration reserves and replacement reserves pursuant to the requirements set out in Article 32.

2.Each TSO of a scheduling area using balancing capacity bids shall settle at least all procured frequency restoration reserves and replacement reserves pursuant to the requirements set out in Article 32.

F130Article 57U.K.Procurement outside a scheduling area

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Textual Amendments

F131TITLE VIU.K.ALGORITHM

F131Article 58U.K.Balancing algorithms

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Textual Amendments

TITLE VIIU.K. REPORTING

F132Article 59U.K.European report on integration of balancing markets

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Textual Amendments

Article 60U.K.TSO report on balancing

1.At least once every two years, each TSO shall publish a report on balancing covering the previous two calendar years, respecting the confidentiality of information in accordance with Article 11.

2.The report on balancing shall:

F133(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)provide the summary analysis of the dimensioning of reserve capacity including the justification and explanation for the calculated reserve capacity requirements;

(c)provide the summary analysis of the optimal provision of reserve capacity including the justification of the volume of balancing capacity;

F134(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F135(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F136(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F137(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1383.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.Based on previously published reports, the [F139regulatory authority] shall be entitled to require changes to the structure and content of the next TSO report on balancing.

Textual Amendments

TITLE VIIIU.K. COST-BENEFIT ANALYSIS

Article 61U.K.Cost-benefit analysis

1.When TSOs are required to carry out a cost-benefit analysis pursuant to this Regulation, they shall establish the criteria and methodology for the cost-benefit analysis and submit them to the [F140regulatory authority] by six months before the start of the cost-benefit analysis. The F141... regulatory authorities shall be entitled to F142... require amendments to the criteria and methodology.

2.The cost-benefit analysis shall at least take into account:

(a)the technical feasibility;

(b)the economic efficiency;

(c)the impact on competition and integration of balancing markets;

(d)the costs and benefits of implementation;

(e)the impact on F143... balancing costs;

(f)the potential impact on F144... electricity market prices;

(g)the ability of TSOs and balancing responsible parties to fulfil their obligations;

(h)the impact on market parties in terms of additional technical or IT requirements assessed in cooperation with the affected stakeholders.

3.All concerned TSOs shall provide the results of the cost-benefit analysis to [F145the regulatory authority], together with a justified proposal on how to address possible issues identified by the cost-benefit analysis.

Textual Amendments

TITLE IXU.K. DEROGATIONS AND MONITORING

Article 62U.K.Derogations

1.[F146The regulatory authority] may, at the request of a TSO or at its own initiative, grant the relevant TSOs a derogation from one or more provisions of this Regulation in accordance with paragraphs 2 to 12.

2.A TSO may request a derogation from the following requirements:

F147(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F147(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F147(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the [F148application] of the imbalance settlement period in Article 53(1);

(e)the implementation of the requirements pursuant to Articles 45, 46, 47, 48, 49, F149... 54, 55, 56 and 57.

3.The derogation process shall be transparent, non-discriminatory, non-biased, well documented and based on a reasoned request.

4.TSOs shall file a written request for derogation to the F150... regulatory authority at the latest six months prior to the day of application of the provisions from which the derogation is requested.

5.The request for derogation shall include the following information:

(a)the provisions from which a derogation is requested;

(b)the requested derogation period;

(c)a detailed plan and timeline specifying how to address and ensure the implementation of the concerned provisions of this Regulation after expiration of the derogation period;

F151(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F151(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.The F152... regulatory authority shall adopt a decision concerning any request for derogation within six months from the day after it receives the request. That time limit may be extended by three months before its expiry where the F152... regulatory authority requires further information from the TSO requesting the derogation. The additional period shall begin when the complete information has been received.

7.The TSO requesting the derogation shall submit any additional information requested by the F153... regulatory authority within two months of such request. If the TSO does not supply the requested information within that time limit, the request for a derogation shall be deemed withdrawn unless, before its expiry, alternatively:

(a)the F153... regulatory authority decides to provide an extension;

(b)the TSO informs the F153... regulatory authority by means of a reasoned submission that the request for a derogation is complete.

8.When assessing the request for derogation or before granting a derogation at its own initiative, the F154... regulatory authority shall consider the following aspects:

(a)the difficulties related to the implementation of the concerned provision or provisions;

(b)the risks and the implications of the concerned provision or provisions, in terms of operational security;

(c)the actions taken to facilitate the implementation of the concerned provision or provisions;

(d)the impacts of non-implementation of the concerned provision or provisions, in terms of non-discrimination and competition with other F155... market participants, in particular as regards demand response and renewable energy sources;

(e)the impacts on overall economic efficiency and smart grid infrastructure;

F156(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.The F157... regulatory authority shall issue a reasoned decision concerning a request for a derogation or a derogation granted at its own initiative. Where the F157... regulatory authority grants a derogation, it shall specify its duration. The derogation may be granted only once and for a maximum period of two years, except for the [F158derogation in paragraph 2(d)] which may be granted until 1 January 2025.

10.[F159The regulatory authority shall notify its decision to the TSO and the Secretary of State.] The decision shall also be published on its website.

11.The [F160regulatory authority] shall maintain a register of all derogations they have granted or refused and shall provide the [F161Secretary of State] with an updated and consolidated register at least once every six months F162....

12.The register shall contain, in particular:

(a)the provisions from which the derogation is granted or refused;

(b)the content of the derogation;

(c)the reasons for granting or refusing the derogation;

(d)the consequences resulting from granting the derogation.

Textual Amendments

F163Article 63U.K.Monitoring

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

TITLE XU.K.F164... FINAL PROVISIONS

F165Article 64U.K.Transitional provisions for Ireland and Northern Ireland

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Article 65U.K.Entry into force

1.This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

2.For Articles 14, 16, 17, 28, 32, 34 to 36, 44 to 49, and 54 to 57, this Regulation shall apply from one year after entry into force of this Regulation.

Textual Amendments

F166...

Done at Brussels, 23 November 2017.

For the Commission

The President

Jean-Claude Juncker

Textual Amendments

(2)

Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (OJ L 220, 25.8.2017, p. 1).

(3)

Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ L 211, 14.8.2009, p. 55).

(4)

Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (OJ L 211, 14.8.2009, p. 1).