ENTSOG Implementation and Monitoring Report 2017 - Balancing Network Code

2.4.2 Results

This new indicator has only been calculated for a few countries where the data were available: BE/LU-H, DE, ES, FR, IT, PL-H and UK-GB. The next report will take into account more countries. For Italy, the small adjustment is an absolute value (0.108€/MWh). It has been transformed in a percentage of the yearly average of the daily WAP. The same treatment has been done for UK-GB which small adjustment value is 0.0379 p/kWh. Regarding BE/LU-H, the small

adjustment is different if the shipper is a “causer” or a “helper”: The small adjustment for causer is 3% whereas the small adjustment for helper is 0%. Causer means that the network user’s imbalance is in the same direction (ex- cess or shortfall) as the global market position. Helper means that the network user’s balancing position goes in the opposite direction as the one of the global market position. In the graphic, only the 3% value has been represented.

Average shipper’s cost of being balanced by a TSO (in % of the WAP)

– 5% – 3% – 1% – 7% 11% 9 % 7% 5% 3% 1%

– 11% – 9%

GASPOOL

NCG

PEG Nord

TRS

IT

PL-H

UK-GB

BE/LU-H

ES

WAP + small adjustment

WAP − small adjustment

Average Buy

Average Sell

Figure 3:  Average shipper’s cost of being balanced by a TSO (in % of the WAP)

2.4.3 Analysis

In Germany, the cost of being balanced by the TSO is larger than the small adjustment (2 to 3.5 times larger). It is a way to incentive shippers to balanced themselves. Since Variant 2 is imple- mented in Germany, shippers know day-ahead their imbalance position for Non-Daily Metered end-customers. Indeed, for this information provision model, the allocation is equal to the day-ahead forecast. So, shippers know in ad- vance their volume risk but not their price risk. In Italy, France and UK-GB, the cost of being balanced by the TSO is slightly greater than the value of the small adjustment (from 8% to 41% larger). Shipper may be confident that the cost will be closed to the small adjustment on aver- age. However, the days the system is tight, the cost could be much higher than the small ad- justment. It was designed with this aim in the BAL NC, i. e. a shipper may take the small adjustment as a proxy for the cost of being bal- anced by the TSO knowing that when the system is tight it will be exposed to a higher cost.

In Poland and in Spain, the cost of being bal- anced by the TSO is equal to the value of the small adjustment. In Poland, the small adjust- ment is set at the maximal value allowed by the BAL NC, i. e. 10%. It is difficult to have a TSO deal at a price larger than the WAP +/− 10%. In the BE/LU-H zone, the average cost of being balanced by the TSO is smaller than the “caus- er” small adjustment value. It is because when a shipper’s balancing position goes in the opposite direction as the one of the global market position, it will be cashed out at the WAP (i. e. without a small adjustment).

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ENTSOG BAL NC Implementation and Effect Monitoring Report 2017