080331 Entsoe Nordic DescriptionBalanceRegulationNordicCountries

8/10/2019 080331 Entsoe Nordic DescriptionBalanceRegulationNordicCountries

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31.03.2008

Organisation for the Nordic Transmission System Operators

Description of Balance Regulationin the Nordic Countries

Report by

the Nordel Market Development Group


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Table of Contents

1 Balancing the system................................................................................ 4

1.1 Focus of this report ............................................................................ 4

1.2 The mechanisms of balancing .............................................................. 4

1.3 Nordel harmonised balance management from 2009............................... 5

2 Regulating resources................................................................................. 62.1 Frequency controlled reserves.............................................................. 62.2 Fast reserves..................................................................................... 6

3 Peak load arrangements ............................................................................ 7

4 Balance regulation.................................................................................... 8

4.1

Normal regulation .............................................................................. 84.2 Special regulation .............................................................................10

5 Differences in balance regulation in the Nordic countries ...............................105.1 General ...........................................................................................10

5.2 Bid requirements ..............................................................................105.3 Bid schedule.....................................................................................11

5.4 TSO management .............................................................................12

5.5 Pricing of regulating power.................................................................12

5.6 Pricing in special situations.................................................................12

Executive summaryNordREG concluded in their report Monitoring of the Nordic Regulating Power market that

there is a lack of transparency regarding balance regulation. Consequently the Nordic Councilof Ministers requested that Nordel should describe the existing rules and operations in areport by March 2008.

This report therefore deals with the current situation in the balance regulation in the Nordic

countries. Over the years Nordel has moved towards a harmonised Nordic balance regulationbut national differences still exist. The most important features of the common balanceregulation are summarized, as well as the differences.

Firstly the role of balance regulation in the balancing process balance planning, balanceregulation and balance settlement - is described. This is interplay between transmissionsystem operators (TSOs) and balance responsible players (BRPs). Mention is made thatfurther harmonisation of the Nordic balance management is planned to come into play fromJanuary 1st 2009. This mainly concerns balance settlement, but balance regulation is alsoaffected by the introduction of common gate-closure times for regulating bids subsequent tothe introduction of intra-day trading (Elbas) in Norway to come in line with the rest of theregion.

Next the various types of regulating resources available to the TSOs for balancing the systemin both normal and abnormal operating conditions are described.

For normal operating conditions there are frequency-controlled reserves to cope quickly andautomatically with the continuously changing electricity consumption. To maintain theregulating capability of the frequency-controlled normal operating reserves, fast reserves areneeded which can be manually activated with about 10 15 minutes response time. These


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are provided by the BRPs in the form of regulating bids to the balancing market. These bidsare coordinated for the Nordic region in a common bid list in a common information system(NOIS).

Abnormal conditions can be faults on power lines or other components, which occurunexpectedly and cause disturbances of varying severity. Immediate counteraction is

required and this is provided by frequency-controlled reserves. After a disturbance it isimportant to restore the regulating capability of the frequency-controlled disturbance reservequickly. The system must be able to cope with a new disturbance which can theoreticallyoccur at any time. For this there are earmarked fast disturbance reserve arrangements.

Abnormal conditions can also be situations, when the market cannot meet the demand.These situations can normally happen when the demand is highest and can be predicted inthe operation planning stage (days ahead). The Nordic TSOs agree that the electricity marketshould be designed to solve the peak load problems and that this is not a responsibility forTSOs. However the authorities in Finland and Sweden have temporarily given the TSOs the

task of managing special peak-load arrangements by procuring resources that are underthreat to be mothballed and would usually not be available to the market. The costs for this

are borne by the market players.

In addition to the regulating bids fast disturbance reserves are also included as bids in the

NOIS-list, but will be kept until all commercial bids have been used. This is usually automaticas the reserves have a higher price than regulating bids. On the other hand, where possibleand as they are usually cheaper, normal regulating bids are used also for disturbances.

The report subsequently concentrates on describing the market-based reserve provision, i.e.

based on regulating bids from players, which is the normal everyday continual processneeded to keep the balance in the electricity system. The description covers the biddingprocess, the management and calling of bids, payment for regulation and setting the hourlyregulating price which is used, together with the spot-market price (Elspot) for balance

settlement. Mention is also made of the possibility of using the regulating bids for otherpurposes than maintaining the electricity balance. Such use is called special regulation and,as it is invariably done to solve various problems, such as congestion, which occur in thetransmission network. The costs for this are financed by the grid tariff and the prices for

balance power are not based on bids used for special regulation.

Frequency-controlled reserves and disturbance reserves are not described in detail. Theprinciples for the amount, location and use of these reserves are stipulated in the SystemOperation Agreement between the Nordic TSOs.

The peak load resources, which are procured based on special legislation for a limited timeperiod, are also listed in the bid list, although, as these are subsidised in various ways, there

are sometimes restrictions concerning how and when they can be activated. Nordel haveproposed harmonisation of the handling of such resources in this respect. For example the

rules for using peak-power resources in Sweden for the extended period 2008 2011 arecurrently being reviewed.

Finally the report attempts to provide a summary of the national differences which still existbetween balance regulation in the Nordic countries. This is provided both in the form of atable (appendix 1) and a summary subdivided under the headings bid requirements, bidschedule, TSO management, and pricing of regulating power. This summary shows thatalthough Nordic balance regulation to a great extent is a common process, there are stillmany national differences as regards the detail.

This report is intended only to describe the common Nordic balance regulation process and tosummarise national similarities and differences. Analysis of the reasons for differences andpossible further harmonisation could be the subject for future work.


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1 Balancing the system

1.1 Focus of this report

This report deals solely with the current situation in the balance regulation (second stepdescribed in 1.2). Over the years Nordel has moved towards a harmonised Nordic balance

regulation. There are however still national differences. Future work is envisaged to furtherdevelop and harmonise the balancing market. NordReg concluded in their report Monitoring

of the Nordic Regulating Power market that there is a lack of transparency regarding thebalance regulation and a need for the TSOs to publish a detailed description of the existingrules and operations.

The Nordic Council of Ministers charged Nordel with the above mentioned task to bepresented in March 2008. This report aims to summarize the most important features of thecommon balance regulation as well as describing some differences between the countriesregarding certain conditions.

Relevant terms and definitions are included in Appendix 2.

1.2 The mechanisms of balancing

The Nordic electricity market is divided into two Balance areas, the synchronous part ofNordel and western Denmark in the UCTE system. The TSO task is to ensure physical balanceand safe system operation.

Energinet.dk is responsible for maintaining a balance between consumption and productionfor western Denmark in relation to the UCTE system.

In the synchronous part of Nordel the frequency should be kept between 49.9 and 50.1 Hzduring normal operating conditions as well as handling of operational disturbances andcongestions. It is agreed that Statnett and Svenska Kraftnt have a joint responsibility tomaintain the frequency of the synchronous part of Nordel using regulating resources from a

joint Nordic list. However regulating resources from Denmark and Finland are co-ordinatedvia Energinet.dk and Fingrid.

The mechanism of balancing consists of three basic steps planning, regulation andsettlement - defined in agreements between the market players and the TSOs:

1) Balance planning

The market players (balance responsible parties, BRPs) have the obligation

(physical/financial) to balance their portfolios of production and purchase againstconsumption and sales on an hourly basis.

When the trading on the day-ahead market has been concluded and the BRPs have sent theirplans to the TSOs, the power system is in principle planned to balance for the next 24 hours.

However, deviations will arise between the contracted and actual supply and demand due tofactors such as changes in weather, interruptions in the grid, generation or consumption.After harmonisation of the balance management in 2009 the BRPs in all countries can adjusttheir balances until the hour of operation, either by changing existing agreements, enteringnew bilateral agreements or by trading on the intra-day market.

2) Balance regulation

During the hour of operation the TSOs have the responsibility to continuously maintain the

overall balance of the power system and thus the security of supply. The TSOs buyregulating power i.e. physical adjustments to generation or consumption - to cover thenet imbalances of the players. This regulation is conducted using various kinds of operational


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resources or reserves, as described below. Since 2002 the Nordic balance regulation hasbeen performed to a great extent as a common function. The differences that still exist aredescribed below (section 5).

3) Balance settlement

The national balance settlements distribute income and expenditure for balance managementamong the BRPs. The BRPs individual hourly imbalances are considered as equivalentpurchases or sales of balance power between the players and TSOs.

The imbalance between the countries is settled between the TSOs based on the regulatingpower prices in the involved countries. The net purchases of regulating power made by the

TSOs equal their net sales of balance power hour by hour.

Figure 1 shows the mechanisms described above as well as the regulating resources whichcontribute to balancing the power system.

Figure 1. Mechanisms for balancing the power system (all Nordic countries from 2009)

1.3 Nordel harmonised balance management from 2009

Nordel has agreed on introducing more common principles for the balance management inJanuary 2009. The harmonisation mainly applies to:

Principles for cost allocation

Calculation and pricing of balance power and common fee structure

Introduction of intra-day trading in the Nordic exchange area


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Defined cost elements will be included in the cost basis for balance management in allcountries and thereby financed by the BRPs.

There will be two balances, one for generation, which will be settled in accordance to the two-

price system, and one for consumption & trade, which will be settled in accordance with theone-price system. The balances will be calculated per price area and be settled with the area

balance power prices.

When introducing this model it is important that all market players in the area have the same

possibility to plan their balance and to adjust it when necessary. Therefore Elbas will beintroduced also in Norway in 2008. Also a harmonised gate closure time of 45 minutes forregulating bids and production plans will be introduced in all countries.

2 Regulating resources

The operational requirements for the Nordic power system comprise such issues asmaintaining sufficient operational reserves in the synchronous part of Nordel, and distributing

the reserves between the subsystems. Denmark West has special conditions in relation to theWestern European synchronous system coordinated by UCTE.

The operational reserves are used to compensate for deviations from the forecasts andvariations in the electricity consumption, and to limit the impact of operational disturbances

in the production and transmission system. They comprise chiefly of frequency controlledreserves and fast reserves as described below. Temporary peak load arrangements (section3) can also be used for balance regulation in special circumstances.

2.1 Frequency controlled reserves

The frequency controlled reserves are activated automatically by frequency deviations.Traditionally they are divided into two categories:

1) Frequency controlled normal operation reserve

The Nordic System Operation Agreement stipulates that the frequency controlled reserve fornormal operation shall totally amount to 600 MW at 50 Hz for the Nordic countries. It shall beactivated with a regulation capacity of 6 000 MW/Hz to keep the frequency between 49.9 and50.1 Hz. This means that the frequency regulating reserve is fully activated at a frequency of49.9 Hz.

2) Frequency controlled disturbance reserve

For larger frequency deviations down to 49.5 Hz, caused by disturbances in the system, the

frequency controlled disturbance reserve is activated. This is dimensioned based on thecurrent dimensioning disturbance, for example the loss of a large generating station. Theamount of the frequency controlled disturbance reserves varies depending on the operationalsituation, but is often around 1000 MW.

2.2 Fast reserves

The fast reserves are activated manually, and must be able to restore the automatic reservewithin 15 min. There are two categories of fast reserves:

1) Regulating bids

The TSOs receive bids for upward or downward regulation from players who are willing toraise or lower their production or consumption. A bid for upward regulation indicates howmuch the player asks to be paid to sell a certain volume of regulating power corresponding toincreased production or reduced consumption. A bid for downward regulation indicates how


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much the player is prepared to pay to buy a certain quantity of regulating powercorresponding to reduced production or increased consumption.

The TSOs submit all their national bids to a common Nordic regulation list sorted according to

rising or falling prices. The list is available to all Nordic TSOs in a common information systemNOIS (Nordic Operational Information System).

These resources are thus traded on a sort of single-buyer market, where the TSOs actjointly as buyer in procuring resources for the balance regulation. This market is called the

regulating power market (RPM) in the Nordic region.

2) Fast disturbance reserves

To be able to deal with disturbances and restore the frequency controlled disturbance reservethere are fast disturbance reserves which must be available in addition to the normalregulating bids. In Sweden and Finland these consist of gas-turbine generation, which isowned or leased by the TSO. In Finland there are also bilateral agreements regarding

demand resources that can be disconnected.

In Norway, there is a market arrangement, RKOM, to secure sufficient operational reserves inthe system. In RKOM Statnett define the need for operation reserves for future periods. Dueto congestions in the grid, necessary operational reserves are defined for different areas.Statnett also requests that larger consumer units make bids into RKOM.

In Denmark there are markets for securing operational reserves (tenders are arranged on adaily basis).

Generally the fast disturbance reserves and the peak load resources (see below) are madeavailable to the common regulation list. However they are not normally intended to be usedas normal bids but to be kept until all commercial bids have been used. This is usually

automatic as the reserves have a higher price than normal bids.

3 Peak load arrangements

As mentioned above there exist special temporary peak power arrangements maintained bythe TSOs in the Nordic region today. Usually such peak load resources can take several hoursto activate in situations when the fast reserve should prove insufficient. Such arrangementsare designed to handle peak load situations and are not decided upon with respect to balanceregulation. The resources within the framework of peak load arrangements can however beused for regulation purposes by the TSOs when it is efficient.

Nordel has previously concluded in its report Peak Production Capability and Peak Load inthe Nordic Electricity Market (April 2004) that the electricity market should be designed tosolve peak load problems. Intervention in the market, such as special arrangements, shouldbe avoided as this reduces incentives for market players to take appropriate decisionsthemselves. Harmonised legislation and regulation concerning roles and responsibilities areseen as vital preconditions for the Nordic electricity market model.

However, the EU Directive 2003/54 allows Member States, as a last resort, to introduce atendering process, or similar safeguarding measures, in order to ensure security of supply.

Such processes have been implemented in Sweden and Finland, as temporary measuresmanaged by the TSOs, for a number of years. Consequently, to minimise negative impacts on

the electricity market if a country should decide temporarily to resort to such measures,Nordel compiled the report Guidelines for implementation of transitional peak load

arrangements (February 2007).


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A peak load arrangement should be an exceptional and temporary solution to overcome acritical period. Although implementing such an arrangement would be a national decision, theguidelines recommend that the Nordic TSOs should be consulted before making the decisionto evaluate how the peak load arrangement may affect the electricity market. The aim shouldbe to minimise any negative impact. Also, despite the national nature of the decision tolaunch a peak load arrangement, it should be based on consistent information and analysis.

In this context it is important to remember that Nordel performs and publishes annualassessments of the future power balances in the Nordic electricity system. In addition theNordic TSOs publish continuous information for the market players regarding the currentstatus and a short-tem prognosis of the electricity balance and any foreseen risk for peak-power problems.

In Finland a temporary law (until 2010) obliges condensing power plants (about 600 MW),

which are under threat of being closed down to be kept in starting readiness of maximum 12hours during the winter period (December-February). Fingrid has to maintain the relatedarrangement. The system is financed through separate fees based on the act. In Finland thepeak load reserves are primarily bid to Elspot market, but can also be bid to the balancemarket according to normal rules for balance regulation.

In Sweden there is a limited-duration law governing the Peak load Reserve. Svenska Kraftnthas been given the responsibility to make a Peak load Reserve of up to 2000 MW available.The reserve consists both of thermal power generation and load reduction in industry and isfinanced by the Balance providers. This reserve is intended to be used when there are no

normal commercial bids left on the regulation list. However, in Sweden, resources from thepeak load reserve may be used for special regulation (see section 4.2 below).

In Denmark, Energinet.dk had an agreement during the winter season 2007/08 on theoperation of unit 4 of the Asns Power Station to ensure the electricity supply in Eastern

Denmark in the event of a very cold winter or outages of large power stations or internationalconnections. The arrangement will not be prolonged.

4 Balance regulation

4.1 Normal regulation

Balance regulation is performed as coordination between frequency-controlled regulation and

manual regulation.

If the electricity consumption is higher than expected, an imbalance occurs between the

consumption and the scheduled production and this causes a frequency reduction. Thefrequency drop causes the automatic reserve (primary regulation) to regulate up and a newbalance is reached. If the frequency remains lower than 50 Hz, the TSOs increase the

production manually by calling regulating bids for upward regulation. This increases thefrequency and hence the automatic reserves will need to regulate down again.

The procedure will be similar when the consumption is lower than expected, except that it willthen be downward regulation which is required.

If upward or downward regulation is needed during the hour of operation, the bids on thecommon Nordic regulating list are used in price sequence as shown in figure 2. Statnett andSvenska Kraftnt make common decisions on these regulations. However activation of theregulating bids in Finland and eastern Denmark is performed via Fingrid and Energinet.dk.


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Figure 2. Bids for up-or down-regulation arranged in merit order

A player whose bid is called will change his production or his consumption to supply orconsume regulating power. His production or consumption plans that were submittedpreviously are modified accordingly. The players who have been called upon to regulate arepaid the equivalent of the highest price for upward regulation or the lowest price fordownward regulation, of the bids accepted for the hour concerned. This means that they geta price which is equal to or better than their bid price. This is done to stimulate bids, andbecause all regulations in reality are worth the same to the regulating function.

Every hour, the regulating power price is set at the price of the last upward or downwardregulation depending on whether the total regulation of the hour concerned has been up or

down. If there have been no regulations, the regulating power price is set at the area pricequoted at the power exchange. The regulating price is also used in the balance settlement, to

settle imbalances between subsystems and to settle player imbalances.

Normally bids are defined on an hourly basis. However, to provide a smooth transition

between the hours, there are various arrangements for ramping or overlapping bids betweenhours. This might affect the regulation price.

If there is no congestion, the regulating power price will be the same for all subsystems. Ifthere is congestion to an area, some regulating bids will be shut off and thereforedisregarded. The regulating power price for this area will then be different from that of

neighbouring areas.

If for example there is an internal congestion In Elspot area A and need for up-regulation in apart of the area. The merit order list indicates that the next generator on the regulation list isin Elspot area B, but due to the congestion it is not possible to transport the power from area

B to the relevant part of area A. It will therefore be necessary to find a generator which canincrease the production in the relevant part of Elspot area A, even though the cost is highercompared to increased production in Elspot area B.

There are also special circumstances in Western Denmark when players are paid the

equivalent of their bid. This only applies to situations with both up- and down regulation inthe same hour and activation of bids from Germany, and not for hours with congestion oninterconnectors.


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Exceptions to the above routine also apply when congestions or other operational safetyconsiderations make it impossible to strictly adhere to the price order. (See section 4.2Special regulation)

Similarities and differences in the balance regulation in the Nordic countries are describedbelow (section 5) and summarized in the table in Appendix 1.

4.2 Special regulation

All TSOs are responsible for ensuring that the physical constraints of the transmission gridare observed. If the transmission grid is congested, the congestion can be alleviated by using

regulating resources to perform counter trade. Regulation to alleviate the congestions aremade first, if necessary followed by regulation of the frequency.

If there is need to use regulation resources to alleviate congestion, or for other technicalreasons except balance regulation, the regulation is termed special regulation. If there is a

simultaneous need for special regulation and up-regulation, the regulating price can beindirectly affected.

The resources used for special regulation will be chosen for geographical or other specialreasons and it will not always be possible to follow the merit order list. The player selling orbuying special regulation is compensated at pay as bid in Denmark, Norway and Sweden.

In Finland marginal is currently used, but "pay as bid" principle is under consideration.

5 Differences in balance regulation in the Nordic countries

The differences in balance regulation between the Nordic countries are described in the tablein Appendix 1. This chapter contains summarised explanations of the table. The tablecontains country specific details and is structured in the following categories:

General Bid requirements

Bid schedule

Pricing of regulating power

Pricing in special situations

5.1 General

5.1.1 Real time measurement

All TSOs have requirements on real time measurement but in Norway it is only when needed

for system security reasons.

5.1.2 Regulation areas

In Norway and Denmark the regulation areas are defined to be the same as the Elspot areas.In Finland and Sweden they equal the country.

5.2 Bid requirements

5.2.1 Who are able to bid balance regulation?

In all countries the BRPs are qualified to make bids. In Finland and Sweden also entities withother agreements can bid. For instance in Sweden, companies that offer peak load reserve

bids. In Finland, companies that have signed an agreement with Fingrid and informed their

balance provider can also bid.


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5.2.2 Block bids allowed

A block bid is a bid that cannot be taken unless the TSO can guarantee that the bid will be

accepted for the number of hours specified. This is not allowed in any countries so far asregards normal bids but is however under discussion

5.2.3 Ways of communicationEDIEL is the main means of communication. However, in Norway and Finland there are alsoweb applications. E-mail and fax may be used as a fall back solution.

5.2.4 Required bid information

Required information is volume, price and regulated object or location. Activation and/orduration time is also required in some countries.

5.2.5 Bid size

The minimum volume is 10 MWh/h except in Norway, where 25 MWh/h normally is used.Exceptions can be made by the TSO. Denmark has a maximum volume of 50 MWh/h.

5.2.6 Pricing of bids

Generally the pricing is free up to a maximum of around 5000 /MWh due to Nordicharmonisation. In Norway bids within small areas that are obviously too expensive, asregards to socio-economics, can be suspended

5.2.7 Bid price unit

The bids are normally given in the local currency. However, Nordel has, as part of a Nordicharmonisation, proposed to give the BRPs the option to submit bids in Euros or the localcurrency in the future.

5.2.8 Activation time

The TSOs require that normal bids to the RPM should be activated within a certain time limitafter the BRP have received the order. In Denmark and Norway the bid should be activatedwithin 15 minutes while it should be within 10 minutes in Sweden and Finland.

5.2.9 Minimum activation time

In Denmark and Norway there is a requirement that a bid should run for at least 10 min to beconsidered in price setting for the regulation price. In Finland and Sweden there is no suchrequirement.

5.2.10Duration capability

There are also requirements for how long the bids should be able to endure and is currentlyone hour in all countries.

5.2.11Repeatability

In order to encourage more regulation bids from the consumption side, such bids are allowed

a recovery time before they can be repeated in Norway. Such repeatability conditions shall bespecified when bidding.

5.3 Bid schedule

5.3.1 Time interval to submit bids

In Norway bids should have been submitted at 19.30 the day before. In the other countriesthe bids shall have been submitted at the latest 30 min before the hour of operation. From


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2009 this will be harmonised by introducing a gate closure for bids 45 min before the hour ofoperation in all countries.

5.3.2 Adjustment and removal of bids

Bids can be adjusted and removed until 30 minutes before the hour of operation in Denmark,

Sweden and Finland. In Norway adjustments or removal of bids have to be agreed with theTSO. From 2009 this will be harmonised by not allowing adjustments of the production plans

after 45 min before the hour of operation in all countries.

5.4 TSO management

5.4.1 TSO allowed to activate part of the total MW bid

TSOs are allowed to activate part of a bid, but in Sweden this must be agreed with the BRP.

5.4.2 Possibility to prioritize large volume bids or bids with fast activation

Bids are put in a bidding list and normally activated in price order if there is no congestion.

However, except for Denmark, TSOs can in emergency circumstances prioritize large bidswith fast activation, although this handling is avoided.

5.5 Pricing of regulating power

5.5.1 Pricing principles (main direction)

In general marginal pricing is used within the Nordel area. In Denmark pay-as-bid is used forbids from Germany.

5.5.2 Determination of up or down regulation hour

In hours with both up and down regulation the net energy volume decides if it is an up or

down hour regulation to be used to determine the regulation price used in balancesettlement.

5.5.3 Pricing principles for bids in hours of both up or down regulation

Marginal pricing is used for bids in the main direction. For bids in the opposite direction pay-as-bid is used in Denmark and Norway and local marginal price in Finland and Sweden. Theseprinciples will be harmonised in 2009.

5.6 Pricing in special situations

5.6.1 Price in case of lacking competition

In Norway the TSO have the possibility to suspend bids that are considered to be obviouslytoo expensive, i.e. not in line with the expected socio economic principles, within small areas.The TSO then can activate the bid at Elspot area price. The other TSOs do not apply theseprinciples.

5.6.2 Pricing of Special regulation due to congestions or testing of reservesuppliers

Bids used for Special regulations are compensated with pay-as-bid, except in Finland wheremarginal pricing is used. Special regulations, i.e., actions taken due to grid problems, do notaffect the balance regulation price.

5.6.3 Peak load reserves made available for balance regulation

In Sweden and Finland peak load reserve can be bid as balance regulation. In Finland theprocedure follows normal routines, but in Sweden a special bid price of 8000 SEK/MWh plus


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variable cost (or the Balance base price if this is higher) is applied. In Denmark the peak loadreserve is not bid as balance regulation.

5.6.4 Operational reserves made available for balance regulation in case of power

shortage

Fast disturbance reserves can be activated in case of a power shortage. They are bid in theNOIS list. In Denmark the operational reserves are bid in for all hours when they receive

capacity payments. In Norway RKOM is bid in as are all operational reserves in Sweden.


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Appendix 1

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Chapter Category Item Denmark Norway Sw

5.1.1 General Real timemeasurement

Yes When required for systemsecurity reasons

Yes, for bidactivation t

5.1.2 General Regulation areas Elspot areas Elspot areas Country

5.2.1Bidrequirement

Who are able to bidin balance regulation

BRPs BRPsBRPs and preserve su

5.2.2Bidrequirement

Block bids allowed No No, being discussed No, being d

5.2.3Bidrequirement

Ways ofcommunication

EDIEL format Quotes(XML from June 1, 2008)

EDIEL is an option, alsoweb applications used

EDIEL, Quoe-mail for reserves,

fax as fallb

5.2.4Bid

requirement

Required bid

information

Volume, price, regulatedobject, activation and

duration time.

Volume, price, regulated

object and duration time.

Volume, pr

object (locactivation tMax and mtime under

5.2.5Bidrequirement

Bid sizeMin 10 MWh/h, max 50MWh/h

min 25MW normally used Min 10 MW


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5.2.6 Bidrequirement

Pricing of bids

Generally free pricing -however minimum spotprice for upward

regulation and maximumspot price for downwardregulation. Max upwardregulation price5000/MWh

Generally free pricing -however min spot price

for upward regulation andmax spot price for down-

ward regulation. Max 50000 NOK/MWh or 2 timesElspot price The pricemust be divisible by 5NOK

Free pricin5000 /MW

5.2.7Bidrequirement

Bid price unit DKK/MWh NOK/MWh SEK/MWh

5.2.8Bid

requirement

Activation timeLatest 15 min after order

received

Latest 15 min after order

received

Latest 10 received. B

longer actcan be sub

are so callsupportiveare mainlycounter tra

5.2.9Bidrequirement

Min activation timeVariable - however min10 consecutive minutesto be price defining

Variable - however min.10 consecutive minutesto be price defining

No limit

5.2.10Bidrequirement

Duration capabilityBids must be capable ofbeing supplied during thewhole operating hour

Bids must be capable ofbeing supplied during thewhole operating hour

Bids must being suppwhole ope

5.2.11 Bidrequirement

Repeatability No Yes related toconsumption

No

5.3.1 Bid scheduleTime interval to

submit bids

Until 30 minutes before

hour of operation.19.30 at D-1.

D-14 until

before hou


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5.3.2 Bid scheduleAdjustment andremoval of bids

Until 30 min before hourof operation. New bidscan also be submitted

during the day ofoperation and bids can

be cancelled if they arenot covered by reservecapacity contracts

Adjustment/removal of

bids later than 19.30 atD-1 - require agreement

with the TSO

Until 30 mhour of opadjustmenmade afte

with the Bfrom occasoccasion.

5.4.1TSOmanagement

TSO allowed toactivate part of theTotal MW bid

Yes Yes Yes, if agr

5.4.2TSOmanagement

Possibility toprioritize big volume

bids or bids with fastactivation.

No Yes Yes, possi

5.5.1Pricing andsettlement

Pricing principles(main direction)

Marginal pricing, but payas bid for someexceptions, for instancebids from Germany.

Marginal pricing Marginal p


Determination of upor down regulationhour

Net volume decides. Net volume decides. Net volum


Pricing principles inhours of both up ordown regulation

If down regulation,common RP price fordown regulation and payas bid for up regulationand vice versa.

If down regulation,common marginal RPprice for down regulationand pay as bid for upregulation and vice versa.

Two margfor up andregulation


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Monopoly price No

TSO can suspend bids,

which is not in line withexpected socioeconomicprice. In this case Elspot

price will be used.

No

5.6.2Pricing and

settlement

Pricing of Specialregulation due tocongestions or

testing of reservesuppliers

Pay as bid, no effect on

RPM

Pay as bid, no effect on

RPM

Pay as bid

RPM

5.6.3 ReservesPeak load reservemade available forbalance regulation

no NA

Yes. WhenReserve isprice of 8 plus the vathe Balancthis is high

applied.

5.6.4 ReservesOperational reservesmade available forbalance regulation

Yes, are contracted tobid in for all hours theyreceive capacity

payments to

Yes RKOM is required tomake bids for balanceregulation

All reserve


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Appendix 2

1

Terms and definitions

AreaPart of the power system within a subsystem; an area can potentially comprise anentire subsystem. An area is bordered by transmission constraints in the national

subsystems or by cross-border links. Area prices are Elspot prices within an Elspotarea.Balance areasAreas of the power system where there is continuous regulation in order to maintainthe frequency and a physical balance in relation to adjacent areas. In the Nordic area,the synchronous system and Western Denmark are separate balance areas.Balance powerThe difference between the planned and measured transmissions between thesubsystems. Balance regulation is regulation in order to maintain the frequency and

time deviation in accordance with the set quality requirements. Regulation is alsocarried out for network reasons.Congestion

Capacity limitation on the transmission network. On the Elspot market, attention ispaid to bottlenecks between the Elspot areas. During operational planning andmonitoring and control, attention is paid to all physical bottlenecks.Counter trading

Purchasing of upward regulation and the sale of downward regulation, on each side ofa bottleneck, which the system operators carry out in order to maintain or increase

the trading capacity of Elspot trading between two Elspot areas, or in order toeliminate a bottleneck during the day of operation.Day of operationThe calendar day around the momentary operational situation.Elbas tradingPower trading in Elbas at Nord Pool Spot. Elbas trading can take place in Sweden,

Finland, Western Denmark and Eastern Denmark prior to and during the day ofoperation after Elspot trading has finished.Elspot areas

Areas of the Elspot market which the interconnected Nordic power system is dividedinto in order to deal with potential capacity limitations (bottlenecks) on thetransmission network. Potential bottlenecks give rise to different Elspot prices in Elspotareas. In Finland, Sweden, Western Denmark and Eastern Denmark, the Elspot areascorrespond to the subsystems. In Norway, there are several Elspot areas within the

subsystem.Elspot prices

Prices in Elspot trading within an Elspot area.Elspot tradingPower trading on the spot market of Nord Pool Spot. Elspot trading can occur prior tothe day of operation in all subsystems.Fast disturbance reserveManual reserve available within 15 minutes in the event of the loss of an individualprincipal component (production unit, line, transformer, bus bar etc.). Restores the

frequency controlled disturbance reserve.Frequency controlled disturbance reserve

Momentarily available active power available for frequency regulation in the range of49.9 49.5 Hz and which is activated automatically by the system frequency.Previously called momentary disturbance reserve.Frequency controlled normal operation reserveMomentarily available active power available for frequency regulation in the range of

49.9 50.1 Hz and which is activated automatically by the system frequency.

Previously called frequency regulation reserve.


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Operational disturbanceDisturbance to the power system. This can be the loss of a line, a bus bar, atransformer, a production unit or consumption.Operational reserveReserve that the system operators have access to during the day of operation.Peak load resource

Active reserves, procured within the framework of special temporary peak-loadarrangements which exist in some Nordic countries, which normally have a longreadiness time. In the event of anticipated peak loads, the readiness time is reducedso that the peak load resource can be used prior to the day of operation on the Elspotmarket or during the day of operation on the regulation market.Price areaAn Elspot area which, due to bottlenecks towards another Elspot area, has been givenan Elspot price of its own.Regulating bids

Bids for upward or downward regulation at a specified output power at a specifiedprice.Regulating power

Activated regulating bids, upward and downward regulations at power plants as wellas the upward and downward regulation of consumption which producers orconsumers offer in exchange for compensation. The system operators activate thesebids during the momentary operational situation to maintain the balance/frequency

within the balance areas and to deal with bottlenecks on the transmission network.Regulation areas

Areas which the regulation market for the interconnected Nordic power system isdivided into in order to manage possible capacity limitations (bottlenecks) on thetransmission network. Potential bottlenecks will entail different regulation prices in theregulation areas. In Sweden, Finland, Western Denmark and Eastern Denmark,regulation areas normally correspond to the subsystems. In Norway, there are severalregulation areas within the subsystem.

Regulation listList of regulation bids in ascending and descending order sorted by the price for onehour.

Regulation marginThe gap between the transmission capacity and the trading capacity. It constitutes thescope for the momentary regulation variations as a result of frequency regulationaround the planned hourly value for transmission. Also called TRM (TransmissionReliability Margin)

Regulation marketMarket for regulating power.

Regulation pricePrice resulting from implemented regulations during the hour of operation for aregulation area. Also called the RK price.Regulation stepsSteps in the regulation list.Special regulationActivation of regulating power in order to deal with bottlenecks on the transmission

network.Subsystem

The power system for which a system operator is responsible. A system operator canbe responsible for several subsystems.Supportive powerPower that adjacent system operators can exchange reciprocally as an element of theregulation of balance in the respective subsystems. Exchanges are made specifying

the power, price, link and time to the exact minute of the start and finish of the

exchange. Supportive power is settled as the hourly average value.


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Synchronous systemSynchronously interconnected power system consisting of the subsystems of Norway,Sweden, Finland and Eastern Denmark. Western Denmark is synchronouslyinterconnected with the UCTE system.System priceEstimated price for the entire Elspot market. The system price is estimated as if there

are no capacity limitations on the transmission network between the Elspot areas.Transmission constraintConstraint on the transmission network between the subsystems or between areaswithin a subsystem. Also referred to solely as constraints.Transmission system operator (TSO)Company appointed to have the system responsibility for a defined subsystem.UCTE(Union for the Co-ordination of Transmission of Electricity) is an association of systemoperators in continental Europe.

Documents

080331 Entsoe Nordic DescriptionBalanceRegulationNordicCountries