Gas balance administration

The system operator's balance administration process consists of three stages:balance planning, balance management, and balance settlement.

Methodology for calculating the price of balancing gas 

In accordance with subsection 16 (1) of the Natural Gas Act, the system operator shall, on the basis of data relating to balance settlement and other relevant data, submit invoices to the balance provider for each calculation period regarding the charges payable for the balance gas purchased by the balance provider and calculate the amounts of balance gas sold by a balance provider to the system operator during each calculation period and pay the balance provider for such amounts.

Decision No. 7-29/2022-001 of 30 September 2022 of the Competition Authority approved the common standard terms and conditions of the balance agreement applicable in the common Estonian-Latvian gas zone of Elering AS and AS “Conexus Baltic Grid”, which also establish the methodology for determining the price of balancing gas and balancing compensation in the common gas zone.   

The marginal sell price (MSP) for balancing gas on gas day D is equal to the lower of the following prices:  

• the lowest price for the sale of any of the main products in which the system operator participated on gas day D (either on the relevant trading platforms or through balancing service agreements) ; 
• the weighted average price of all trading transactions of the main products on the relevant trading platforms on gas day D, multiplied by the MSP incentive.

The marginal buy price (MBP) of balancing gas day D is equal to the highest of the following prices: 

• the highest price for the purchase of any of the main products in which the system operator participated on gas day D (either through the relevant balancing service agreements); 
• the weighted average price of all trading transactions of the main products on the relevant trading platforms on gas day D, multiplied by the MBP incentive. 

As of 1 December 2021, the MBP incentive is 1.10 and the MBP incentive is 0.95 (NB! System administrators have the right to adjust both incentives during the year with an advance notice of no less than three days).

Balancing gas prices can be found on the Elering Live website:  Elering Live

Balancing compensation

In accordance with the standard terms and conditions of the common gas zone and with the aim of ensuring the financial neutrality of system operators, a balancing compensation is implemented as a separate component from 2020, which is determined taking into account the following revenues and costs:  

• Revenue and costs arising from daily imbalance charges 
• Revenue and costs arising from balancing operations 
• Administrative costs arising from balancing operations
• Other revenue and costs attributable to balancing operations

Balancing compensation is allocated to the network user according to the flows exiting the network user’s portfolio (including domestic consumption, quantities exiting across borders and sold at the virtual trading point).

Balancing compensation (10 February 2020)