The balancing price list is updated to handle possible negative prices

The Danish Utility Regulator has now approved Energinet Gas TSO’s method submission, to include negative prices in the balancing price formula. The possibility to handle negative prices will have effect from tomorrow 6 August 2020.

Negative prices cannot occur in practice yet, as the European gas exchange EEX still awaits introducing the possibility. However, when the possibility is introduced, Energinte Gas TSO will be ready to handle negative prices.

The level of gas prices in Denmark is historically low and there is still a potential risk of negative prices in Q3 2020. The current formula for balancing prices does not give the right incentives for balancing if negative prices occur. Hence, Energinet Gas TSO submitted a suggestion of change of method to DUR, to correct the balancing incentive formulas to give the right incentive to balance when prices are negative. DUR has now approved this method.

Energinet Gas TSO published an article about this topic 16 June 2020 at which you can read more about the methodology and the arguments for the change in formula needed:

The new balancing price list with the updated formula for balancing prices will have effect as of 6 August 2020.



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