23.12.2016

Electricity balancing: EUGINE's feedback on the draft guideline

EUGINE is the centre of knowledge for engine power plant technology and electricity market design. Its members are the leading European manufacturers of engine power plants and their key components. As flexible, energy-efficient, reliable and environmentally sound technology, engine power plants are an optimal solution to offset growing variations and ensure security of supply.

The intermittency, balancing and flexibility challenges are key for tomorrow’s EU power system. The proposed guideline on electricity balancing is an important step towards common rules for electricity balancing at EU level and solutions to these challenges; EUGINE particularly welcomes the article 19 banning balancing energy price floors and caps (except if set at VOLL).

To make balancing markets and the overall energy system fit for the integration of increasing shares of variable renewables, ‘imbalance charges’ (penalty) should reflect the full costs for balancing the system and ‘utilisation fees’ should be based on actual marginal prices. ‘Reserves’ should be procured on a shorter-term basis (ideally: the day ahead or even shorter);

EUGINE strongly supports the reduction of the Imbalance Settlement Period (ISP). However, current wording of article 55 ("ISP of 15 minutes") is not sufficient: the imbalance settlement period should be reduced to "5 minutes". If no consensus can be found on this value, it should be "equal to or shorter than 15 minutes". Moreover, in opposition to paragraph 2, no exemption should be possible, to avoid a patchwork of diverging rules.

EUGINE would be pleased to further contribute to improving the balancing regulatory framework and remains at your disposal for any additional information.

See our contribution on the EU Commission's website