1)      What are the key points of balancing from 01.10.2022? 

The objectives and requirements of the further developed balancing system are, in accordance with the specifications of the NC BAL, to depict:

  • an integrated balancing zone covering the transmission and distribution network level with a central balancing office, in which the currently separate balancing tasks of the BKO and the MGM are performed
  • a daily balancing system with central physical balancing and complete daily financial settlement of the balancing groups
  • an adapted intraday incentive system for optimised use of the buffer capacity of the grids
  • the timely provision of preliminary allocation data and the hourly updating of market area information
  • incentives for BGR to minimise the use of balancing energy
  • Prompt and at the same time efficient settlement through the use of established financial clearing processes
  • cost and revenue neutrality through the daily determination of the balancing charge
  • centralised billing of excess and shortfall quantities for all distribution grids for ex-post reconciliation of differences between the allocation data used for daily balancing and final meter readings from end consumers
  • the (current) mechanism for limiting balancing group imbalances that cannot be controlled on a market basis
  • transparent network balancing.

2)      How does balancing work in the MA-T&V?

While the GMMO-VO 2020 is in principle valid for all market areas, Part 6 contains separate provisions for the market areas Tyrol and Vorarlberg.

This is necessary due to:

  • structural differences of these market areas compared to the market area (no transmission lines, no VTP, etc.) as well as
  • the implemented COSIMA model for the connection of the market areas Tyrol and Vorarlberg to the upstream German market area - this is to be applied unchanged!

Taking into account the fundamental changes (balancing energy prices, intraday incentives, provision of information, etc.), the principles that have applied to date will largely be retained.

Since the organisation of the balancing group system and the allocation of unique identification numbers in the Market Area East is carried out by the MADAM, this should also be the case in the Market Areas Tyrol and Vorarlberg for synergy reasons.

3)      How does pricing work if there are no offsetting balancing energy (BE) purchases?

The principles of the pricing of balancing energy are illustrated by the following figure, where the small adjustment with the start of the new model on 1.10.2022 is 3%:

Source: E-Control Austria

4)      When do BE purchases occur?

The MADAM (Market Area and Distribution Area Manager) AGGM only buys/sells BE when the network buffer at transmission and distribution area level is not sufficient to balance the network.

5)      When does the within day incentive scheme apply and how does it work?

In principle, the intraday incentive system is only applied if the MADAM had to carry out opposite calls of physical balancing energy on the respective gas day.

The starting point for determining the cost contribution is the hourly differences between the entry and exit quantities of a balance group. These hourly differences are cumulated over the gas day (cumulated hourly difference quantity) and compared with a tolerance quantity for each hour. The tolerance quantity per balance group for each hour is four percent of the allocated offtakes to end consumers on that day.

The basis for calculating the cost contribution of a gas day (overrun quantity) is the sum of the respective hourly overruns of the tolerance quantity by the cumulated hourly difference quantity.

The specific cost contribution basically corresponds to the difference between the volume-weighted average prices for physical balancing energy purchases or sales of the MVGM on the respective gas day.

The absolute cost contribution of a balancing group manager is calculated by multiplying the specific cost contribution by the overrun quantity. The balancing agency shall ensure that the sum of the cost contributions of all balancing group representatives for a gas day is in any case limited to the resulting total costs of the balancing energy purchases or sales for the purpose of structuring on this gas day.

6)      Are the prices for BE procurement published? And when?

The MADAM publishes the balancing energy prices, the cost contribution for intraday structuring, the amount of the neutrality charge, the balance of the neutrality account and the balance of the neutrality charge on a daily basis after receiving them from the balancing agency.