BALTIC BALANCING MARKET

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BALTIC BALANCING MARKET

• Ingrid Arus
• Baltic Balancing Market Harmonisation WG meeting
• 17 01 2008

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• Introduction and background
• Conditions for create a common balancing market
• Why now?
• ERGEG Guidelines of Good Practice for Balancing
  Markets Integration
• Main goal of WG to study different options to
  create a common Baltic balancing market

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Baltic Minifora meetings
2006 Tallinn Lithuania The development of
common Baltic energy market Common balancing
market Common reserve capacity
market Estonia Work out energy policy
together Create transparency (for grid
access) Licensing make market entry
easy Establish one balancing market
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Baltic Minifora meetings

• 2006 Vilnius
• Lithuania
• Common Baltic reserve and regulation power
  market
• Estonia
• Harmonized market rules
• Latvia
• Baltic Power Exchange
• increased trade possibilities true reference
  price for electricity integration of Baltic and
  Nordic market

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Baltic Minifora meetings

• 2007 Riga
• Lithuania (all Baltic regulators)
• Licensing proposals for common rules
• Conclusion Regulators can take interim steps to
  facilitate the entry of prospective participants
  into our domestic markets and into Common Baltic
  Electricity Market
• Estonia (from Baltic Energy Strategy) weaknesses
• Limited marketplace
• Small number of players
• Absence of common energy policy

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Baltic Minifora meetings

• 2007 Tallinn
• Lithuania
• What do we need for the functioning market?
• harmonised rules of the game
• many players
• future vision
• Estonia
• ERI Convergence and Coherence Report
• Main issues
• congestion management common policy for import
  from 3rd countries balancing rules transparency
• Where is Baltic market?

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Baltic Minifora meetings

• 2007 Tallinn
• It was agreed to establish a new working group,
  which includes the representatives of the Baltic
  TSO-s, regulators and independent market
  participants. The goals are to harmonize existing
  balance system in Baltic region and create common
  Baltic (balancing) market in future. The working
  group will be coordinated by the Estonian TSO
  (Põhivõrk).

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Baltic Electricity Market

• Where is Baltic Market?
• What we need for creating a common market?
• (PRE-)CONDITIONS
• 100 OPENED MARKET (ESTONIA 35 2009 100 -
  2013)
• CONDITIONS
• COMMON RULES
• FOR CONGESTION MANAGEMENT
• FOR MARKET ENTRY LICENSING
• COMMON POLICY FOR IMPORT FROM THIERD COUNTRIES
• HARMONISED PRINCIPLES OF BALANCING
• TRANSPARENCY
• HARMONISED ADMINISTRATIVE PROCEDURES
• OBJECTIVE
• EFFICIENT MARKET
• EASY ENTRY TO THE MARKET MORE PARTICIPANTS
• COMPETITION
• LOWER COST

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Why now?

• Preparation the opening of Estonian electricity
  market for all players
• Estonian (Baltic) electricity market rules
  harmonisation with rules applied in Nordel
• Estlink price area project started 11.2007
• I phase Price area Estlink, Implicit auction to
  cover at least part of the Estlink capacity
  09.2008
• II phase Price area Baltic, Final target is to
  create
• Spot price area to Baltic countries and intraday
• market Elbas ½ - 2 years after I phase

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ERGEG Guidelines of Good Practice for Balancing
Markets Integration

• ERGEG is committed to the development of an
  effectively competitive single market for
  electricity across the whole EU, while at the
  same time taking into account security of supply
  and system reliability.
• Balancing market integration - as a key issue for
  an internal electricity market.
• Directive 2003/54/EC assigns to the regulator the
  sole competency for the functioning of the
  balancing market within a Member State. According
  to the Article 23, Paragraph 2 The regulatory
  authorities shall be responsible for fixing or
  approving, prior to their entry into force, at
  least the methodologies used to calculate or
  establish the terms and conditions for the
  provision of balancing services.

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Principles and Benefits of Efficient Electricity
Balancing Markets

• THE PURPOSE of balancing markets is to serve
  short-term operational security of supply
  (security of grid operation) in a market oriented
  way and to deal with imbalance settlement.
• BALANCING MARKETS
• should promote effective competition
• should not aggravate market power
• should be non-discriminatory
• BALANCING MARKET shall have
• clear rules and
• transparent processes
• THE RESPONSIBLE REGULATORS must clarify the
  regulatory route by which the integrated
  balancing market is monitored and its rules
  enforced.
• Appropriate STANDARDS for AUTOMATIC DATA and
  INFORMATION EXCHANGE between BRP and market
  actors during planning, operation and settlement
  phases of balancing shall be in place to ensure
  secure system operation and to facilitate
  transparency.
• IMBALANCE ARRANGEMENTS and PRICING RULES shall be
  made compatible in a truly integrated balancing
  market.

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Principles and Benefits of Efficient Electricity
Balancing Markets

• TSOs and other market participants can operate in
  an economically efficient manner
• More participants
• Competition
• Decreased cost

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Main target of WG

• Final target Common Baltic Balancing Market
• WG To study perspectives, principles and
  timeline for creating the Baltic Balancing
  Market
• Define the scope of Baltic Balancing Market
• Identify purpose and possible gains
• Examine the effects for market participants (inc.
  TSOs)
• Harmonisation of definitions
• Harmonisation of planning time-scale
  responsibilities in time-scale
• Common reserve and regulation market
• Balance settlement harmonisation
• number of balances
• balancing energy price

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• THANK YOU FOR YOUR ATTENTION!