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The following sections provide detailed information on the process and progresses related to the Baltic imbalance settlement and mFRR standard balancing product harmonisation.

On February 17th, 2017 the Baltic TSOs disclosed their final proposal for the harmonised imbalance settlement model, which was published and submitted to all relevant Baltic electricity market’s stakeholders. The document, titled the Baltic Imbalance Settlement Document Model, included updates in comparison to the preliminary settlement model issued by the Baltic TSOs on June 27, 2016. 

On April 18th, 2017 the Baltic TSOs submitted a joint letter to the Baltic NRAs with the purpose to seek their support and advocacy to go forward with the relevant national regulatory amendments and proceedings in each Baltic State in order to get the agreed harmonised rules and arrangements in place and effective by January 1st, 2018, as planned. In their response, the Baltic NRAs drew attention to the fact that although the TSOs efforts for market harmonization are highly appreciated, in order to implement the imbalance settlement design as the TSOs proposed, valid laws and regulations in each Baltic State should be followed.

Because of concerns that the subsequent amendments to local laws, which the TSOs have already pursued, might not get passed duly on time, and provided that the adoption of the European wide regulation, the Guidelines on Electricity Balancing, is foreseen, yet not guaranteed, to take place during December 2017, the Baltic TSOs have opted that rather than risk the postponement of the Baltic harmonised settlement model altogether, changes will be made to some of the aspects of the model so that conflicts with current legislation are avoided. In effect, this would ensure the timely launch of the Baltic harmonised settlement model on January 1st, 2018. These transitory changes shall remain in effect until the regulatory proceedings for the final model have been successfully completed. Nevertheless, the final model shall not take effect earlier than January 1st, 2019.

Please find attached the document titled “Adjusted Baltic Harmonised Imbalance Settlement Model 2018“  for further information on the Baltic imbalance settlement model incl. the alterations for 2018.

Baltic transmission system operators Elering AS (Elering), AS Augstsprieguma tīkls (AST) and LITGRID AB (Litgrid) (hereinafter – Baltic TSOs) conducted the public consultation on “Baltic CoBA development elements” which lasted from June 27th until August 15th 2016. The objective of the consultation was to gather feedback from Baltic electricity market participants and stakeholders regarding Baltic mFRR standard product for balancing and Baltic imbalance settlement harmonisation proposed by the Baltic TSOs.

Following the public consultation on the harmonised Baltic imbalance settlement model, the Baltic TSOs have now concluded imbalance settlement model proposal, which shall be adopted within the Baltics at the start of 2018. The model was developed taking into consideration present draft edition on the Guidelines on Electricity Balancing and the feedback received through the public consultation process.

By the 4th quarter of 2017 each TSO will publish the standard terms and conditions for BRPs approved by national regulatory authorities and the new model is planned to become effective from January 1, 2018.

Baltic TSO's would like to thank all stakeholders for taking active involvement throughout the public consultation process and Baltic mFRR market development. Baltic TSOs are looking forward for further cooperation with stakeholders for advancement of Baltic balancing market integration. Baltic TSOs believe this shall add multiple benefits for participants of our Baltic –Nordic regional market.

The detailed description of the Baltic TSOs conclusive harmonised Baltic imbalance settlement model can be found in attachment below.

As of November 1st, 2016, the transmission system operators (TSOs) of Estonia, Latvia and Lithuania introduce standard manually activated frequency restoration reserves (mFRR) products. Elering, Augstsprieguma tīkls and Litgrid signed the agreement enabling effective exchange of Baltic balancing energy.

In the Baltic countries the standard mFRR products will be used to control power balancing in normal and emergency situations. Until now the Baltic balancing energy market participants provided balancing services under bilateral agreements with their local TSOs. The information about balancing offers was exchanged between the TSOs according to their bilateral agreements, too. From November 1st, all bids of the standard mFRR products will be available for activation by each of the Baltic TSO from a single Baltic common merit order list. When the common balancing market starts fully functioning in 2018, balancing energy procurement shall be optimised for balancing of the whole Baltic area and the cheapest available offers will be selected first.

The principles of the standard mFRR product were introduced to the market participants during a six week public consultation this summer. Their comments were considered by the Baltic TSOs before the agreement was finalised.

The introduction of standard mFRR products and advancing Baltic TSOs balancing cooperation is a big step towards the common Baltic balancing energy market. It will benefit market participants with expanded balancing services market and at the same time foster cross-border competition increasing efficiency and cost-savings and maintaining the high degree operational security of the Baltic power systems. The next goal for the Baltic TSOs is to extend this cooperation with the Nordic TSOs and to integrate balancing of the whole Baltic Sea area.

For more information on the rules of balancing in Estonia, please click here.

The detailed stakeholders feedback and Baltic TSOs responses on the Baltic mFRR standard product with updated Baltic mFRR standard product and on the Baltic harmonised imbalance settlement model can be found attached below.

Baltic transmission system operators Elering AS (Elering), AS “Augstsprieguma tīkls” (AST) and LITGRID AB (Litgrid) (hereinafter – Baltic TSOs) are commonly working on development of Baltic Coordinated Balancing Area (hereinafter - Baltic CoBA) for the exchange of manual frequency restoration reserves, which shall become fully operational by 1 January 2018. The draft guideline on Electricity Balancing foresees the harmonisation of various elements that currently differs in each country; therefore, Baltic TSOs have jointly developed a set of documents for the possible way forward on establishing Baltic CoBA. 

Active stakeholder engagement is a prerequisite to further improvements and developments of these documents and market functioning as such; therefore, the Baltic TSOs kindly invite all interested stakeholders to respond in writing to our request for comments on the draft documents.

We are waiting for your written comments in English by 15.08.2016, 23:59, EET to the email address as below:

1. Each stakeholder may submit the feedback to the contact address:

  • consultations@ast.lv or AS “Augstsprieguma tīkls”, Dārzciema iela 86, LV-1073 for the attentions to Ms. Kristine Marcina.

2. Each BRP and BSP may also submit the feedback directly to its connected TSO as follows in English or local language as preferred:

The public consultation documents can be found down below.

The Baltic TSOs plan to launch a common Baltic balancing market by 2018. As a prerequisite, the Baltic countries must harmonize and adopt a common set of imbalance settlement arrangements beforehand. The goal is to develop unified, transparent conditions to all market participants which should in effect level the playing field for all market participants throughout the Baltics, foster competition and thus enhance the Baltic electricity market’s efficiency.

In August 2015, Elering procured a balance management harmonisation study from consultancy service provider Pöyry Management Consulting to carry out an in-depth analysis on a harmonised balance management model most suitable for the Baltic balance system. The study, titled "Baltic's balance management model study and harmonisation plan towards EU energy markets model" delves into different balance model aspects, describing possible alternatives in terms such as the number of balance portfolios, the cost structure for covering balance service, and different pricing methodologies for imbalance energy etc. The study was prepared in close collaboration with all three Baltic TSOs (Elering, Augstsprieguma tīkls and Litgrid) during 08.2015 – 04.2016.

As a next step, the Baltic TSOs will compile a joint public consultation document on the balance model harmonisation, which in turn will be forwarded to the balance providers. After evaluating the feedback on the public consultation document, the Baltic TSOs shall make the decision on the Baltic harmonised balance model by the end of the year. The rules however will come in to effect in the beginning of 2018.

According to the BEMIP (Baltic Energy Market Integration Plan), one of the most important steps of the Baltic-Nordic electricity market integration is the establishment of a common balancing power market with harmonised balancing principles and pricing rules. It is essential that the new rules and principles are in accordance with the requirements set forth by the ENTSO-E Network Code on Electricity Balancing, and in addition, be compatible with the model applied by the Nordics.

The study document created by Pöyry could be found attached below.

In response to the early implementation of the Guidelines on Electricity Balancing, ENTSO-E, the umbrella body for the EU Electricity Transmission System Operators, supported by ACER, initiated a number of activities and pilot-projects. The Nordic TSOs proposed several pilot-projects to examine the possibilities to exchange balancing energy from Frequency Restoration Reserves with manual activation (mFRR) between the Nordic TSOs and their neighboring countries, one of which included a feasibility study on the cooperation between the Nordic and the Baltic States.

The feasibility study regarding the cooperation between the Nordic and the Baltic power systems was carried out by the Baltic and Finnish transmission system operators between 05/2014 and 11/2014. The study includes a set of recommendations for further actions in order to deepen the cooperation of mFRR product exchange between the Nordic and Baltic States, and with the objective of creating a common Baltic-Nordic balancing power market.

According to the results of the study, the Baltic-Nordic balancing market cooperation and development process should be split into the following four steps:

1. Widening of the current cooperation practices between the Nordic and Baltic TSOs.

  • Taking into account the foreseen development of the Baltic mFRR market, the current TSO-TSO assistance between Fingrid and Elering should be further developed and new possibilities for cooperation should be tested. After the commissioning of the NordBalt DC connection, the cooperation could also be extended to take place between Svenska Kraftnät and Litgrid;
  • This kind of assistance could also be extended to include a Baltic-Nordic mFRR market cooperation model where it would be possible to activate mFRR bids other than the bids available in the connecting countries.

2. The creation of a common Baltic Balancing Area, which consist of:

  • A joint open supply agreement so that the distribution of cross-border open supply costs would be based on equal principles and allocated as efficiently as possible;

  • A common Baltic balancing power market with a common Baltic balancing bid merit order list, standard product activation procedures, and common TSO-TSO balancing energy pricing methodology;

  • A harmonized balance model (planning, management, settlement, and imbalance pricing) and a common IT solution for said model; and

  • A concept on how to cooperate with the power systems of 3-rd countries.

3. Widening the cooperation between the Baltic and Nordic balancing markets in preparation of the the Nordic and Baltic balancing market integration. This includes the harmonization of standard products, the operating principles of the balancing markets, and the exchange of the common Nordic-Baltic balancing merit order lists.

4. The creation of a common Baltic-Nordic balancing power market as the final objective.

The underlying study is made available down below.

On February 17th, 2017 the Baltic TSOs disclosed their final proposal for the harmonised imbalance settlement model, which was published and submitted to all relevant Baltic electricity market’s stakeholders. The document, titled the Baltic Imbalance Settlement Document Model, included updates in comparison to the preliminary settlement model issued by the Baltic TSOs on June 27, 2016. 

On April 18th, 2017 the Baltic TSOs submitted a joint letter to the Baltic NRAs with the purpose to seek their support and advocacy to go forward with the relevant national regulatory amendments and proceedings in each Baltic State in order to get the agreed harmonised rules and arrangements in place and effective by January 1st, 2018, as planned. In their response, the Baltic NRAs drew attention to the fact that although the TSOs efforts for market harmonization are highly appreciated, in order to implement the imbalance settlement design as the TSOs proposed, valid laws and regulations in each Baltic State should be followed.

Because of concerns that the subsequent amendments to local laws, which the TSOs have already pursued, might not get passed duly on time, and provided that the adoption of the European wide regulation, the Guidelines on Electricity Balancing, is foreseen, yet not guaranteed, to take place during December 2017, the Baltic TSOs have opted that rather than risk the postponement of the Baltic harmonised settlement model altogether, changes will be made to some of the aspects of the model so that conflicts with current legislation are avoided. In effect, this would ensure the timely launch of the Baltic harmonised settlement model on January 1st, 2018. These transitory changes shall remain in effect until the regulatory proceedings for the final model have been successfully completed. Nevertheless, the final model shall not take effect earlier than January 1st, 2019.

Please find attached the document titled “Adjusted Baltic Harmonised Imbalance Settlement Model 2018“  for further information on the Baltic imbalance settlement model incl. the alterations for 2018.

Baltic transmission system operators Elering AS (Elering), AS Augstsprieguma tīkls (AST) and LITGRID AB (Litgrid) (hereinafter – Baltic TSOs) conducted the public consultation on “Baltic CoBA development elements” which lasted from June 27th until August 15th 2016. The objective of the consultation was to gather feedback from Baltic electricity market participants and stakeholders regarding Baltic mFRR standard product for balancing and Baltic imbalance settlement harmonisation proposed by the Baltic TSOs.

Following the public consultation on the harmonised Baltic imbalance settlement model, the Baltic TSOs have now concluded imbalance settlement model proposal, which shall be adopted within the Baltics at the start of 2018. The model was developed taking into consideration present draft edition on the Guidelines on Electricity Balancing and the feedback received through the public consultation process.

By the 4th quarter of 2017 each TSO will publish the standard terms and conditions for BRPs approved by national regulatory authorities and the new model is planned to become effective from January 1, 2018.

Baltic TSO's would like to thank all stakeholders for taking active involvement throughout the public consultation process and Baltic mFRR market development. Baltic TSOs are looking forward for further cooperation with stakeholders for advancement of Baltic balancing market integration. Baltic TSOs believe this shall add multiple benefits for participants of our Baltic –Nordic regional market.

The detailed description of the Baltic TSOs conclusive harmonised Baltic imbalance settlement model can be found in attachment below.

As of November 1st, 2016, the transmission system operators (TSOs) of Estonia, Latvia and Lithuania introduce standard manually activated frequency restoration reserves (mFRR) products. Elering, Augstsprieguma tīkls and Litgrid signed the agreement enabling effective exchange of Baltic balancing energy.

In the Baltic countries the standard mFRR products will be used to control power balancing in normal and emergency situations. Until now the Baltic balancing energy market participants provided balancing services under bilateral agreements with their local TSOs. The information about balancing offers was exchanged between the TSOs according to their bilateral agreements, too. From November 1st, all bids of the standard mFRR products will be available for activation by each of the Baltic TSO from a single Baltic common merit order list. When the common balancing market starts fully functioning in 2018, balancing energy procurement shall be optimised for balancing of the whole Baltic area and the cheapest available offers will be selected first.

The principles of the standard mFRR product were introduced to the market participants during a six week public consultation this summer. Their comments were considered by the Baltic TSOs before the agreement was finalised.

The introduction of standard mFRR products and advancing Baltic TSOs balancing cooperation is a big step towards the common Baltic balancing energy market. It will benefit market participants with expanded balancing services market and at the same time foster cross-border competition increasing efficiency and cost-savings and maintaining the high degree operational security of the Baltic power systems. The next goal for the Baltic TSOs is to extend this cooperation with the Nordic TSOs and to integrate balancing of the whole Baltic Sea area.

For more information on the rules of balancing in Estonia, please click here.

The detailed stakeholders feedback and Baltic TSOs responses on the Baltic mFRR standard product with updated Baltic mFRR standard product and on the Baltic harmonised imbalance settlement model can be found attached below.

Baltic transmission system operators Elering AS (Elering), AS “Augstsprieguma tīkls” (AST) and LITGRID AB (Litgrid) (hereinafter – Baltic TSOs) are commonly working on development of Baltic Coordinated Balancing Area (hereinafter - Baltic CoBA) for the exchange of manual frequency restoration reserves, which shall become fully operational by 1 January 2018. The draft guideline on Electricity Balancing foresees the harmonisation of various elements that currently differs in each country; therefore, Baltic TSOs have jointly developed a set of documents for the possible way forward on establishing Baltic CoBA. 

Active stakeholder engagement is a prerequisite to further improvements and developments of these documents and market functioning as such; therefore, the Baltic TSOs kindly invite all interested stakeholders to respond in writing to our request for comments on the draft documents.

We are waiting for your written comments in English by 15.08.2016, 23:59, EET to the email address as below:

1. Each stakeholder may submit the feedback to the contact address:

  • consultations@ast.lv or AS “Augstsprieguma tīkls”, Dārzciema iela 86, LV-1073 for the attentions to Ms. Kristine Marcina.

2. Each BRP and BSP may also submit the feedback directly to its connected TSO as follows in English or local language as preferred:

The public consultation documents can be found down below.

The Baltic TSOs plan to launch a common Baltic balancing market by 2018. As a prerequisite, the Baltic countries must harmonize and adopt a common set of imbalance settlement arrangements beforehand. The goal is to develop unified, transparent conditions to all market participants which should in effect level the playing field for all market participants throughout the Baltics, foster competition and thus enhance the Baltic electricity market’s efficiency.

In August 2015, Elering procured a balance management harmonisation study from consultancy service provider Pöyry Management Consulting to carry out an in-depth analysis on a harmonised balance management model most suitable for the Baltic balance system. The study, titled "Baltic's balance management model study and harmonisation plan towards EU energy markets model" delves into different balance model aspects, describing possible alternatives in terms such as the number of balance portfolios, the cost structure for covering balance service, and different pricing methodologies for imbalance energy etc. The study was prepared in close collaboration with all three Baltic TSOs (Elering, Augstsprieguma tīkls and Litgrid) during 08.2015 – 04.2016.

As a next step, the Baltic TSOs will compile a joint public consultation document on the balance model harmonisation, which in turn will be forwarded to the balance providers. After evaluating the feedback on the public consultation document, the Baltic TSOs shall make the decision on the Baltic harmonised balance model by the end of the year. The rules however will come in to effect in the beginning of 2018.

According to the BEMIP (Baltic Energy Market Integration Plan), one of the most important steps of the Baltic-Nordic electricity market integration is the establishment of a common balancing power market with harmonised balancing principles and pricing rules. It is essential that the new rules and principles are in accordance with the requirements set forth by the ENTSO-E Network Code on Electricity Balancing, and in addition, be compatible with the model applied by the Nordics.

The study document created by Pöyry could be found attached below.

In response to the early implementation of the Guidelines on Electricity Balancing, ENTSO-E, the umbrella body for the EU Electricity Transmission System Operators, supported by ACER, initiated a number of activities and pilot-projects. The Nordic TSOs proposed several pilot-projects to examine the possibilities to exchange balancing energy from Frequency Restoration Reserves with manual activation (mFRR) between the Nordic TSOs and their neighboring countries, one of which included a feasibility study on the cooperation between the Nordic and the Baltic States.

The feasibility study regarding the cooperation between the Nordic and the Baltic power systems was carried out by the Baltic and Finnish transmission system operators between 05/2014 and 11/2014. The study includes a set of recommendations for further actions in order to deepen the cooperation of mFRR product exchange between the Nordic and Baltic States, and with the objective of creating a common Baltic-Nordic balancing power market.

According to the results of the study, the Baltic-Nordic balancing market cooperation and development process should be split into the following four steps:

1. Widening of the current cooperation practices between the Nordic and Baltic TSOs.

  • Taking into account the foreseen development of the Baltic mFRR market, the current TSO-TSO assistance between Fingrid and Elering should be further developed and new possibilities for cooperation should be tested. After the commissioning of the NordBalt DC connection, the cooperation could also be extended to take place between Svenska Kraftnät and Litgrid;
  • This kind of assistance could also be extended to include a Baltic-Nordic mFRR market cooperation model where it would be possible to activate mFRR bids other than the bids available in the connecting countries.

2. The creation of a common Baltic Balancing Area, which consist of:

  • A joint open supply agreement so that the distribution of cross-border open supply costs would be based on equal principles and allocated as efficiently as possible;

  • A common Baltic balancing power market with a common Baltic balancing bid merit order list, standard product activation procedures, and common TSO-TSO balancing energy pricing methodology;

  • A harmonized balance model (planning, management, settlement, and imbalance pricing) and a common IT solution for said model; and

  • A concept on how to cooperate with the power systems of 3-rd countries.

3. Widening the cooperation between the Baltic and Nordic balancing markets in preparation of the the Nordic and Baltic balancing market integration. This includes the harmonization of standard products, the operating principles of the balancing markets, and the exchange of the common Nordic-Baltic balancing merit order lists.

4. The creation of a common Baltic-Nordic balancing power market as the final objective.

The underlying study is made available down below.

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