The National Electricity Market Operator – MEMO is actively involved in implementing reforms in the energy sector. At...
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BALANCE SHEET LIABILITY
National electricity market operator
PPEE
BALANCE SHEET LIABILITY
What is balance liability?
The reliability of the operation of the power system is based on maintaining the frequency within certain limits of 50 Hz. This is achieved so that at any moment there is a balance between the production and consumption of electricity. Electricity as a product is specific due to its nature and the challenges that arise when storing it. It is the duty of every participant in the electricity market to plan their trade portfolio carefully and responsibly in order to have the smallest deviations between production and consumption. In practice, there are always deviations from these plans, which is usually the result of events that are difficult to predict (eg increased electricity consumption, increased or decreased production of electricity from renewable sources as a result of changes in weather conditions, etc)
These unwanted deviations are inevitable and are part of the daily functioning of all electricity systems, therefore every participant in the electricity market is the balance responsible party who is invoiced for the costs arising from these deviations. These deviations are called unbalance.
To regulate these imbalances, and thus to maintain the balance of the electricity system, the operator of the electricity transmission system performs constant monitoring of the consumption and production of electricity and activates mechanisms for their reconciliation through the purchase or sale of electricity on the market balance energy. MEMO, in its function as an operator of the electricity market, prepares a proposal for calculating the costs incurred for balancing according to a pre-determined methodology.
Considering the importance of balancing the electricity system, each participant in the electricity market is responsible for the imbalances resulting from its activities in the market and should cover the incurred costs for regulating those imbalances. This means that one of the prerequisites for participation in the electricity market is that the potential participant has regulated his balance responsibility.
How is balance liability regulated?
There are two ways in which electricity market participants can regulate their balancing responsibility:
Method 1 – By concluding a Balance Responsibility Agreement with TSO and forming a balance group
In this case, the potential participant in the electricity market submits a request to acquire the status of a balance responsible party (BOS), after which he concludes an agreement with the TSO. In this way, a new balance group is formed where the applicant receives the status of BOS and thus assumes the balance responsibility for the newly formed balance group. New members may join this balancing group in the future, and the BOS is obliged to regulate the imbalances of the members within its balancing group and to fulfill the financial obligations of its balancing group towards TSO.
Information about the procedure for concluding a Balance Liability Agreement with TSO as well as the necessary documents are published on the website of MEPSO at the following link.
Method 2 – By approaching an existing Balance group
A potential participant in the electricity market can regulate its balancing responsibility by joining an existing balancing group. The balance groups that the potential participant can access can be found in the register of Balance groups and BOS at the following link.
After this, it is necessary for both parties to jointly submit a Request for the assumption of balance responsibility (BPBO form) to MEMO. The request for assuming balance responsibility consists of two parts, where the first part (the first part) is filled out by the Balance Responsible Party (BOS), which assumes the balance responsibility for the applicant, while the second part (the second part – Member of the Balance Group) is filled out by the applicant that is the member who accesses the Balance Group of the BOS.
Switching and disconnecting balance group members
The balance responsible party (BOS) in accordance with the rules for balancing the electricity system, can submit a request to MEMO for the exclusion or transfer of members from its balance group.
The request should be submitted on one of the following forms:
The request should be submitted on one of the following forms: