ENTSOG Implementation and Monitoring Report 2017 - Balancing Network Code

Annex IV: Incentive mechanism for TSO to optimise their balancing actions

Incentive mechanism for TSO to optimise their balancing actions

COUNTRY

SHORT EXPLANATION OF HOW THE MECHANISM WORKS AND INCENTIVISES THE TSO TO OPTIMISE THEIR BALANCING ACTIONS.

AT

Physical balancing of TSOs has to be done primarily by the usage of Linepack. If necessary, the Market Area Manager procures volumes at the VTP to the best achievable market price according to his GTC.

ES

According to the NRA’s Circular implementing the Balancing Network Code, the incentives scheme is based on the performance of Enagás in its role of Technical Manager of the System. It takes into account the market options available to the transmission system operator for the selection and use of balancing actions and it is subject to periodical review by the National Authority for Markets and Competition. The incentive mechanism introduces measures aimed at the improvement of the information to the market and the efficiency of the TSO balancing actions. In particular, performance indicators have been defined by the Italian NRA according to the following three mechanisms: 1) Network offtakes forecast (D-1 forecast vs. actual) 2) Efficient TSO balancing actions (difference for the gas Day D, between TSO prices (max. buy/min. sell) vs. WAP) 3) Residual balancing (use of Linepack and, if necessary, operation storage within a predefined range) To ensure the GB TSO does not incur excessive costs for the industry, the NRA already incentivises the GB TSO to balance and trade efficiently through ‘Residual Balancing’ Incentives. The TSO is incentivised in two ways: (1) To minimise the price spread of its balancing actions (to restrict the impact of such actions on the market price); and (2) To minimise the change in the Linepack volumes between the start and end of the day. By seeking resolve any system imbalances on the relevant day the costs of such are targeted to those responsible for the imbalance.

IT

UK-GB

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ENTSOG BAL NC Implementation and Effect Monitoring Report 2017