The term ‘balancing’ in an electricity System includes all the necessary procedures for the continuous adjustment of the total production to the total load with the purpose of maintaining a “stable” 1 frequency at the System. The balancing procedure is the most critical “ancillary” service for maintaining a proper and safe operation.
Although the structure and operation of the markets related to other ancillary services have not yet been clarified and are being planned and negotiated at European level, the “balancing” market has already been included in the design of the target model due to its criticality for the safety of the System and the smooth operation of the other energy markets.
The balancing market in Greece is based on the unit based/central dispatching model): The System Operator, selects the bids (which are given per production unit) with the lowest price on the basis of on an optimization algorithm, and issues corresponding orders to each production unit selected for the provision of each service. Specifically, in the first stage, it is ensured that the System has sufficient available capacity to provide balancing services in accordance with the Operator's estimates and then, when necessary, the required orders are issued to the entities that provide balancing services. Entities that provide balancing services submit bids to the market per unit, per load zone and per interconnection border. This model is used in many European countries, is a natural continuation of the current allocation model implemented in our country and has proven to ensure the greatest possible security of the System.
Implementation of the balancing market will take place through three separate markets:
- The Balancing Capacity Market
- The Balancing Energy Market
- The Imbalances Settlement
The Balancing Capacity Market has as its purpose to ensure adequate balancing resources prior to real time, in accordance with the System’s requirements for secure operation. The Balancing Energy Market is practically the real time market where the balancing energy products are activated based on bid prices and the System needs. Finally, Imbalances Settlement aims to allocate the cost to all the parties responsible for imbalances in real time compared to the last declared schedules of the other markets.
In the framework of the Balancing Capacity Market, the System Operator determines the amount of required reserves for each balancing capacity product that it deems necessary for each allocation period and participants submit bids for these products, provided they have the technical capacity to provide them. Participation in the Balancing Capacity Market takes place prior to real time. The market design has prescribed the three key balancing capacity products. Upward and downward Frequency Containment Reserve (FCR), Upward and downward manual (non-automatic) Frequency Restoration Reserve (mFRR), and Upward and downward automatic Frequency Restoration Reserve (aFRR). Participants are compensated for the balancing capacity quantity that corresponds to them from the market clearing s on a pay-as-bid basis every 30 minutes and participants are required to commit the respective capacity in order to maintain a safe margin for System balancing in real time.
The dispatch and balancing market settlement period is 15 minutes, compared to the current imbalances settlement scheme which is one hour.
In the context of the Balancing Energy Market, all entities that can provide balancing services are required to submit bids to the market for the necessary balancing energy products, the amount of which has been determined by the System Operator. Market design has provided for products of Upward and downward manual Frequency Restoration Reserve (mFRR) and Upward and downward automatic Frequency Restoration Reserve (aFRR). Close to real time, the operator estimates, based on the System condition, where activation of Upward or downward manual Frequency Restoration Reserve (mFRR) is necessary and then issues the corresponding orders based on the lowest priced bids. In real time, the entities that can provide aFRR, receive automatic orders for activation of the lowest priced bids in order to ensure the balance of the System, under the limitation of protecting the safe operation of the System. This is a process similar to Automatic General Control (AGC). Energy is compensated at a marginal price per balancing energy product, except for reallocation cases, when it is compensated at the bid price and every 15 minutes.
Imbalances Settlement takes place post real time and aims at the compensation or charge of the energy arising from any imbalances of the participants in the Balancing market from the last schedule of the market and/or the dispatch orders. During the settlement process, the condition of the System is taken into consideration, as well as the bid prices activated for System balancing and for every 15-minute settlement period.
The core of the Balancing Market is the Integrated Scheduling Programming (ISP) which is a process carried out by the System Operator to shape the dispatch schedule of units and allocate the balancing capacity to the entities that provide it. The ISP is carried out on a schedule three times: once immediately after the clearing of the Day Ahead Market and two more times after the clearing of each one of the two intraday auctions carried out in the framework of the Intraday market. It may also be carried out on demand, each time the Operator deems that there are significant changes during the operation of the System (e.g. significant faults, such as loss of production unit, interconnection loss, forecast failures, etc.). The ISP clearing takes place for 30-minute dispatch periods. The results of the ISP clearings are not binding for its first execution, are binding for the first 24 dispatch periods of the dispatch day for the clearing after the first intraday auction and are binding for the last 24 dispatch periods of the dispatch day for the clearing after the second intraday auction. Participants, before the clearing of the first ISP, submit bids both for the balancing capacity and for the balancing energy, for each 30-minute dispatch period. The balancing capacity quantities allocated to each participant as above during the next two scheduled clearings of the ISP are committed and compensated in the framework of the Balancing Capacity Market, regardless whether in real time the entities provide balancing energy or not.
For the clearing of the Balancing Energy Market, the Operator converts the 30-minute energy bids of the participants into 15-minute bids, while participants may submit only improved bids in relation to the bids submitted at the first ISP, namely bids with a lower price in the case of production unit or bids with a higher price in the case of load. The last available 15-minute energy bids received participate in the real-time balancing energy market, as mentioned above. At this point it should be noted that the design of the Balancing Market has taken into consideration all potential balancing energy supply sources, namely conventional units, RES units, and load, in the case of Aggregators, which can provide balancing capacity and energy products after the conduct of the relevant pre-selection tests.
Finally, the Imbalances Settlement takes place when the required metering data are available, closing the cycle of Balancing Market processes.
All processes related to the operation and the clearing of the Balancing Market will be carried out by IPTO, whereas the settlement of the transactions and coverage of the market’s financial risk will be undertaken by the HEnEx Clearing House.
1. Within zone of preset ± 200 mhz limits around the nominal frequency of 50Hz