Energinets current balancing model was implemented in October 2022
Energinet Gas TSO and Nordion Energi has developed the current gas balancing model for shippers in the joint Danish/Swedish gas market.
Why the current gas balancing model?
Keeping the balance in the Danish/Swedish gas market when integrating Baltic Pipe, as well as the green transition is complex and important. How the balancing model works and how imbalance fees are calculated is described in the approved submission of methodology you find under documents below and to the right and in clause 9 and 17 to Energinets Terms and conditions for gas transport Rules (energinet.dk)
The current model was created with input from stakeholders
Input from and cooperation with stakeholders in an open dialogue is needed to succeed. Several user group meetings and Task Forces dialogue with shippers led up to the implementation in 2022.
The initial dialogue with stakeholders and shippers included a lot of questions which you can read some of below. Also, the presentations from the user group meetings are available under documents on this page.
Methodology approval process
Friday 11 June 2021 Energinet submitted the final methodology document to the Danish Utility Regulator with adjustments to the earlier balancing model. The document was revised after a market consultation on the draft.
At the same date Nordion Energi sent their Balance Agreement with references to the Rules for Gas Transport to Energimarkadsinspektionen in Sweden. The Terms and conditions for Gas Transport has therefore been updated with adjustments to the balancing model.
How does the BAMs handle 3-hours' lead time for trades, and 2-hours' lead time for other points, when the survival time of the gas system is 3 hours?
The BAM will calculate a flexibility for the market, that considers the different commercial lead-times.
Will the BAM continue to forward within-day data during the gas day, when introducing WDOs
The BAM is still obliged to forward within-day data in accordance with the Balancing Network Code.
How does the Balancing area manager (BAM) handle data quality and data frequency?
BAM is in close dialogue with Evida and Nordion Energy regarding data quality and frequency.
Examples on how the trade in the yellow zone function
Example:
At 8 am the Accumulated System Balance, ASB is published. Each shipper will also get a signal of its Individual Accumulated Shipper Balance, IASB, and thereby the shipper will know if he or she is a causer or a helper up to this hour during the gas day. In this example there are two shippers that are causers.
At 8 am, ASB is 500 MWh outside the green zone, and this creates a signal to the BAM that it must trade an amount that will ensure that the ASB will come inside the green zone. The BAM will therefore trade 500 MWh equal to 28 MW in the Within-day market for ETF at EEX (with the lead time, there is 18 hours back in the gas day).
After the BAM has sold 500 MWh, this amount will be pro rata allocated to the two shippers that are causers. Shipper I is long with 500 MWh, and Shipper II is long with 2,000 MWh. Therefore, Shipper I will be allocated 100 MWh, and Shipper II will be allocated 400 MWh. The causers are allocated these amounts instantaneously and even though the actual delivery of the gas will happen during the last 18 hours of the gas day. Therefore the BAM will reserve some flexibility to be able to cooperate with this delayed response. The instantaneously allocation of gas to the causers will have the effect that the ASB (if all other things are equal) will be in the green zone the hour after.
Shipper I and Shipper II will have to pay the marginal price for the gas that is allocated their portfolio. If the BAM has traded twice; 16 MW to 10 EUR/MWh and 10 MW to 10.50 EUR/MWh, the marginal price will be 10.50 EUR/MWh.
Which type of within-day obligation is used?
Energinet Gas TSO and Nordion Energi use a system-wide within-day obligation (Balancing Network Code, Article 25 (1)) with equal hourly restrictions throughout the gas day.
How are data sent out to the shippers?
BAM will send data to shippers in edigas format every hour at XX:40. Data will also be shown on Energinet Online.
How will shippers be compensated, if data is of a low quality?
See description of No Punishment Principle in draft method application.
Is NPP applied if a shipper is misplaced as causer?
Yes
Will smoothing be based on accepted nominations at the Joint Exit Zone?
No, the shippers individual smoothing profile will be based on the shipper’s nomination on the Smoothing Allocation Point (SAP).
Would it be possible to renominate at the Smoothing Allocation Point (SAP)?
Yes, you can send the first nomination on SAP before 14:00 before the gas day and latest at 04.00 before the gas day.
How is the Smoothing Max Value distributed among shippers?
It is based on 7 days old market share
Will the smoothing be on gas supplier level?
No, only on shipper level
Does the Danish Gas Storage plan any new storage products for balancing purposes?
Gas Storages Denmark are looking into shorter lead time in coordination with the TSO. However, Gas Storage Denmark informs, that shippers who have specific ideas for new products are welcome to contact them.
Will there be an automized process for use of fallback data? (Please note that there could be challenges during easter holiday and Christmas)
Yes, it will as today be based on an automized fall back process.
Why not use fallback data from previous hour? When using 7 days old fallback data the weather conditions might have changed.
True, but if an error occurred resulting in the use of fallback data for a period of time and not just for an hour, it may be more precise to use 7 days old fallback data for each specific hour.
Are there any limitation set in relation to which price the BAM can trade at when ASB reaches the yellow zone?
No, there are no limitations set for the price. However, there will be internal guidelines, as today, for the BAM when trading in the yellow zone.
How far into the green zone will the BAM trade when ASB is in the yellow zone?
The BAM will trade the exact quantity so that the ASB will be traded back into the green zone, down to 1 MWh
How is it handled if the BAM are to trade 0,5 MWh in order to reach the green zone, but the within-day market only offers 2 MWh? Is there any minimum quantity outside the yellow zone before the BAM trades?
The procedure will secure that the BAM is allowed to trade smaller amounts just inside the green zone
