Integrated electricity balancing market is the final building block in the creation of the European electricity market. To date, the progress in integrating national balancing markets has been limited, mainly due to significant differences in existing national balancing markets. While most of these arrangements can be harmonised to a certain degree, some differences appear to be inherent to differences in balancing resources being available in Member States. In September 2012, the Agency adopted its Framework Guidelines on Electricity Balancing. These aim at providing a solid framework for the integration of national balancing markets and the achievement of the single European electricity balancing market. These Framework Guidelines focus on increasing cross-border competition in the balancing timeframe and on the overall efficiency of balancing the electricity system, while safeguarding the security of supply.
The core element of the Framework Guidelines are the models for cross-border exchanges of balancing energy that should first emerge in different geographical areas and gradually, i.e. within 6 years after the entry into force of the Network Code on Electricity Balancing, be integrated into one European platform where all TSOs would have access to different types of balancing energy while taking into account the transmission capacities available between different areas. To enable the creation of such a market, several requirements need to be implemented such as a common set of rights (in particular in terms of access to the balancing markets and in terms of remuneration) and obligations (in particular in terms of balancing responsibility) for all types of market participants (generation and demand). The Framework Guidelines also foresee a more efficient procurement and use of balancing reserves.
Finally, the Framework Guidelines on Electricity Balancing require the standardisation and harmonisation of key elements such as balancing products, balancing energy pricing and imbalance pricing, which are considered as prerequisites before the markets can be fully integrated. The roles and responsibilities of TSOs, Balance Service Providers and Balance Responsible Parties also need to be harmonised to a large degree to achieve a level playing field for competition in different Member States.
The timeframes, within which the European balancing market should be achieved, represent a balance between the expectations of different stakeholders and the current limited progress in the integration of balancing markets compared to other markets (e.g. day-ahead market).