Balancing energy and balancing capacity markets
Fingrid maintains a balancing energy market together with the other Nordic transmission system operators. A reserve provider is obliged to give an amount of up regulating bids, which corresponds to accepted capacity bids, to the balancing energy market in exchange for a financial compensation. A balancing energy market contract with Fingrid is needed to participate in the market.
The Nordic TSOs activate bids on the balancing energy market whenever necessary during normal operation or disturbances. Activation is done manually from Fingrid's Main Grid Control Center.
The balancing capacity market was introduced in the spring of 2016. A reserve provider whose capacity bid is accepted on the balancing capacity market is obliged to give up regulating energy bids to the balancing energy market in exchange for a financial compensation. The balancing capacity market is used to secure that Fingrid has a sufficient amount of Manual Frequency Restoration Reserve to cover the dimensioning fault also during maintenance of Fingrid's own and leasing reserve power plants.
Balancing energy bids may be given for all resources that can carry out a 10 MW change of power in 15 minutes (5 MW if using electronic activation). The bids are given to Fingrid no later than 45 minutes before operational hour in accordance with the balancing energy bid instructions.
Balancing energy bids should include the following information about adjustable capacity:
- power (MW)
- price (€/MWh)
- transmission area in which the bid resource is located
- the name of the balancing resource, e.g. power plant, type of production, etc.
Balancing energy bids are either upregulating or downregulating bids. In case of upregulation, the resource owner either increases production or decreases consumptions and therefore sells energy to Fingrid. In case of downregulation, the resource owner decreases production or increases consumption and buys energy from Fingrid.
A Nordic balancing energy bid list is prepared from all balancing energy bids by setting the bids in order of price. For balance management and frequency maintenance, the balancing energy bids are used in order of price to the extent allowable by the operational situation of the power system. Of the up regulating bids, the cheapest is used first and, correspondingly for down regulating bids, the most expensive is used first. If, because of the operational situation, a bid cannot be used, it is then left unused.
Reserve providers, whose capacity bid has been accepted in the balancing capacity market auction, give their balancing energy bids for the next day's hours on the previous day by 11:00.
The prices of balancing energy are set based on the balancing carried out in the Nordic balancing energy markets. Both an up regulating and down regulating energy prices are set for each operational hour.
The up regulating price is the price of the most expensive up regulating energy bid used, however at least the price in the Finnish price area in Nord Pool (Elspot FIN).
Everyone from whom Fingrid has ordered up regulating during the hour receives payment for the energy agreed based on the up regulating energy price.
The down regulating price is the price of the cheapest down regulating energy bid used, however no more than the price in the Finnish price area in Nord Pool (Elspot FIN).
Everyone from whom Fingrid has ordered down regulating during an hour pays the down regulating energy price for the agreed energy.
The balancing energy prices also serve as a basis for the pricing of imbalance power.
Balancing energy prices are primarily published on Nord Pool's website no later than two hours after the operational hour in question.
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