Developing the gas balancing model for implementation in 2022

Energinet Gas TSO and Nordion Energi are developing the existing gas balancing model for shippers in the joint Danish/Swedish gas market.

Why develop on the existing gas balancing model?

Keeping the balance in the Danish/Swedish gas market when integrating Baltic Pipe, as well as the green transition becomes more complex and just as important as it is today.


Moving forward with input from stakeholders

Input from and cooperation with stakeholders in an open dialogue is needed to succeed. To reach this end, several user group meetings and Task Forces will be held and dialogue with shippers will follow leading up to the implementation in 2022.

The initial dialogue with stakeholders and shippers has led to some questions which you will find on this page. Also, the presentations from the user group meetings are available under documents on this page.


Methodology approval process

Friday 11 June Energinet submitted the final methodology document to the Danish Utility Regulator with adjustments to the commercial balancing model. The document was revised after a market consultation on the draft. 

At the same date Nordion Energi send their Balance Agreement with references to the Rules for Gas Transport to Energimarkadsinspektionen in Sweden. The Rules for Gas Transport has therefore been updated with adjustments to the balancing model. 

Find the documents below: 

Submission of methodology 

Rules for Gas Transport (DRAFT) Non-compare version

Rules for Gas Transport (DRAFT) compare version 




Questions and answers to the balancing model:

Document containing answers to general questions and questions relating to smoothing:

How will 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 it be possible to reduce the 2-hour lead-time towards the storages?

Energinet Gas TSO will investigate this possibility, from a market, legal and technical perspective, in dialogue with Gas Storage Denmark.

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.

Which constraints are foreseen in providing enough data to shippers (data quality and data frequency), for the market to take over a larger part of balancing responsibility?

  1. The BAM is in close dialogue with Evida and Nordion Energy regarding an investigation of how to provide enough data to the shippers. Energinet Gas TSO expects that there are investments needed to ensure enough data. 

  2. Shippers will also be involved in this process.  

What are the challenges and costs of providing more data?

  1. The BAM is in close dialogue with Evida and Nordion Energy regarding an investigation of how to provide enough data to the shippers. Energinet Gas TSO expects that there are investments needed to ensure enough data. 

  2. Shippers wil also be involved in this process.  

Will the same requirements for data quality and data frequency be available for the Swedish part of the balancing zone?

Energinet Gas TSO is in close dialogue with Nordion Energi about how to ensure the same requirements for data quality and data frequency in Denmark and Sweden.

Will the BAM continue to trade the day-ahead product at night for within-day?

The BAM will continue to trade the within-day product at night for the coming gas day, as the day-ahead will not be delivered before the gas day D+2.

How will the BAM handle that renominations and trades have a lead time of 2 or 3 hours, meaning that the renomination will not be considered in the coming hours after the ASB has been in the yellow zone?

The causers in the specific hour (se illustration), will be allocated the full amount of the traded gas instantaneously, which will bring the ASB into the green zone. Renominations and trades will be considered in accordance with the regular nomination rules. 

Graphic example of balancing the gas market

Energinet Gas TSO will investigate this possibility, from a market, legal and technical perspective, in dialogue with Gas Storage Denmark.

Can you give some examples in numbers on how the trade in the yellow zone will function in the revised model?


Graphic example of balancing the gas market

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. 


Why is it necessary to add within-day obligations to the current balancing model?

The current balancing model (overall method implemented as of 1 October 2014) is in overall terms described as a daily balancing model with no within-day obligations. The current concept is that every hour, the expected system commercial balance, E(SCB) for the entire gas day is calculated based on nominations and expected offtake in Denmark/Sweden for all hours of the gas day.

The main rationale behind the current daily balancing model with no added restrictions is the characteristics and parameters of the current physical system. In short, there are no normal flow scenarios or situations that cannot be handled in the physical system within-day, and thus there is no need for restricting shippers in their daily input-offtake during the gas day. 

The balancing model has been subject to several additions and amendments, since it was first implemented in October 2014, but the overall method has not been changed.

The implementation of the Baltic Pipe Project, enabling a gas flow from Norway through Denmark to Poland, will result in significant changes to the Danish transmission system both in terms of flexibility and possible flow volumes.

One of the main consequences of this transition is that the daily balancing model cannot absorb all possible imbalances during a gas day, even though network users are in balance end-of-day. This means that even in a normal situation, network users can bring the system out of its physical boundaries during a gas day, potentially jeopardizing the system integrity, if the current daily balancing model continues without amendments.

This issue is well-known in other EU countries, and has been for many years, also before the Balancing Network Code was developed. TSO’s such as Net4gas (Czech Republic), Gas Connect Austria and Fluxys (Belgium) are all characterized as transit systems, where the dominant flow directly enters and exits the system, and where the volumes for the domestic market is significantly lower than the transit volumes.

The Balancing Network Code includes clauses on within-day obligations, which were especially added to accommodate the potential large imbalance challenges of transit systems during a gas day, where the daily balancing timeframe is not sufficient in all normal flow scenarios. For the same reason, the 3 systems mentioned above have all implemented within-day obligations as add-on to the daily balancing regime.

For Energinet Gas TSO and Nordion Energi, this gives a clear reasoning for including within-day obligations in the future balancing system when the Baltic Pipe commences; the transit flow will potentially challenge the system integrity within-day, and within-day obligations are the specific mean to mitigate such a challenge.

Which type of within-day obligation will be implemented?

Energinet Gas TSO and Nordion Energi will implement a system-wide within-day obligation (Balancing Network Code, Article 25 (1)) with equal hourly restrictions throughout the gas day. The main benefit of choosing the system-wide within-day obligation is that the current green zone balancing system is already system wide by collecting and informing on the aggregated commercial balance position of all shippers.

Also, when Energinet Gas TSO first implemented the current green zone model, it was very much inspired by the balancing systems in the Netherlands (GTS) and Belgium (Fluxys). Energinet Gas TSO implemented a similar model, but without including the system-wide within-day obligation, which is common in both systems, as this was not required given the parameters of the Danish physical system at the time. Instead, the Estimated System Commercial Balance was implemented to create the system wide daily balance.

Have the other WDO possibilities described in the Balancing network code also been considered?

Yes, Energinet and Nordion Energi have carefully considered all options and possibilities in the Network Code Balance including all 3 within-day obligation options in the code.

What are the reasons for not choosing the balancing portfolio within-day obligation?

The main reason for Energinet and Nordion Energi not choosing the balancing portfolio WDO is that it is characterized as being sub-optimal compared to the system-wide WDO. With a system-wide WDO, you obtain the benefit of netting out different network user’s positions, which gives the opportunity to utilize the full potential of the network flexibility.

With a balancing portfolio WDO each network user is allocated an individual range or “green zone” to stay within. If a single network user is out of range, the respective network usere will be faced with a charge, even though the general system might be sufficiently balanced.

Based on this, and based on the reasoning why implementing system-wide WDO, Energinet and Nordion Energi find that the system-wide WDO is more beneficial for both the single network users and the system as a whole, compared to the balancing portfolio WDO.

What are the reasons for not choosing the Entry-exit within-day obligation?

To properly answer this question, a more detailed description of how such a WDO could be implemented, is required.

In Energinet’s and Nordion Energi’s analysis, an entry-exit WDO is considered between the entry point from Norway and the exit point towards Poland. This means that the variation between the inflow from Norway and the offtake towards Poland must stay within certain hourly boundaries. In a simple example, a limit of 1,000 units could be considered meaning that the difference between entry EPII and exit Faxe must not differ more than 1,000 units per hour.

Hereby follows a simple example of how such a model could work in practice.

Example: We focus on the following network users in the Danish-Swedish gas system on a given gas day each with a very simple gas portfolio:

  • Shipper A, bringing gas from Norway directly towards Poland
  • Shipper B, bringing gas from Norway to Danish end-consumers
  • Shipper C, buying gas on the Danish market and bring it to Poland
  • Shipper D, bringing gas in from Ellund to the Swedish market

In a given gas hour, the four shippers have the following entry-exit flow. The gas flows related to either entry from Norway or exit towards Poland are highlighted in bold:

  • Shipper A: entry = 10,000 units; exit = 10,800 units; balance = 800 units short
  • Shipper B: entry = 5,000 units; exit = 6,000 units; balance = 1,000 units short
  • Shipper C: entry = 3,200 units; exit = 3,000 units; balance = 200 units long
  • Shipper D: entry = 2,500 units; exit = 2,600 units; balance = 100 units short

In total, this means that the system is short with 1,700 units in that specific hour. When we focus isolated on the balance between the entry from Norway and exit towards Poland, the balance between these two specific points are:

  • Entry: 10,000 + 5,000 = 15,000 units
  • Exit: 10,800 + 3,000 = 13,800 units
  • Difference = 1,200 units long

With a variation limit of 1,000 units, this means that the variation is out of the boundaries with 200 units on the long side. The causers in this case would be Shipper A and Shipper B, as they are bringing too much gas into the system from Norway, compared to what is delivered towards Poland. However, both shippers are also short in the total system.

The example illustrates a number of issues with the entry-exit WDO in a Danish-Swedish context:

  • The isolated variation between the entry- points relevant for the WDO does not automatically cause an issue for the total balance of the system, as gas can enter and exit the system at a number of points. In the design this could mean that the variation between the two points should be held up against the total balance of the system to create the right incentive to balance
  • This means that Energinet and Nordion Energi in any case would have to implement the system-wide WDO, including the ASB (Accumulated System Balance) and IASB (Individual Accumulated Shipper Balance) , in order to calculated the balance per hour for the whole system. Also, it would not be possible to isolate the hourly balance for only the relevant entry-exit points, as shippers could be active both in the current system and at the new points (e.g. a Danish shipper buying gas in Norway for the end-consumer market)
  • This also means that the expected data model, creating an hourly balance for all shippers, would also need to be implemented to the same degree as with the system-wide WDO alone when using the entry-exit WDO, as it is not possible to isolate shippers to certain parts of the system

In general, the entry-exit WDO seems to be designed for systems where the transit flow is relatively isolated from the rest of the system. In the Danish-Swedish context, the new infrastructure is fully integrated into the current system with full possibility to utilize the different entry-exit points.

There is only one country in the EU, who has implemented the entry-exit WDO, which is Bulgaria. ACER described the Bulgarian WDO in 2017: “Severe restrictions to renominations are applied that limit network users’ ability to manage their imbalances and to supply flexibility into the short-term market “ (

For Energinet and Nordion Energi, the example above and the issues derived therefrom, illustrates the reasoning for why the entry-exit WDO would not work in practice in the Danish-Swedish context.





Would it be possible to combine the system-wide within day obligation (WDO) with the portfolio within day obligation (WDO)?

It is Energinet and Nordion’s interpretation that in principle it would be possible to combine the system-wide WDO with the portfolio WDO. However, Energinet and Nordion find that the combination would undermine the benefits of the system-wide WDO and would bring in the downsides of the portfolio WDO, described in a former question-answer regarding portfolio WDO.

The clear benefit of the system-wide WDO is that the Balance Area Manager (BAM) would only trade, when all flexibility is utilized, also taking into account shippers having positions in the opposite direction. Adding a new limit per shipper via the portfolio WDO will in practice result in always reaching a shipper limit before reaching the optimal limit, and thereby it will undermine the function and benefit of the system-wide WDO.

How often are we planning on calculating the market shares?

From day to day. 

How are data sent out to the shippers?

BAM will send data every hour at XX:40. 

How will the startup be, will historic data be used?

We will start from scratch, but data from the most recent day(s) will be used to find the right level.

Based on which criteria will you collect data?

The prioritized order will be based on size in terms of yearly volumes, as this is the most important parameter, when most large end-users will be collected, and will also include large volatile customers.

Will the prioritized order be public?

It is not possible to publish the exact list, as this is classified information. However, the overall principle will be known.

How will shippers be compensated, if data is of a low quality?

See description of No Punishment Principle in draft method application.

Which control mechanisms will be in place, to ensue correct data?

Energinet and Nordion will discuss needed control mechanisms, in cooperation with the Danish and Swedish DSO’s.

Can we get the graphs on data quality with higher percentage or distribution of the 10 per cent?

Yes, see minutes from User Group on 3rd March 2021

Can we get the data for the historic accumulated imbalances and the green zone in a spread sheet?

Yes, spreadsheet is added on the balancing webpage at Energinet.

How is it possible that the ASB at slide 7 (presentation from User Group held on 28 October 2021) is affected right away after the BAM has traded?

The commercial part is handled in the system by Energinet right after the trade, whereas physically the gas will be delivered with 3 hours lead time as rest-of-day. The difference between the commercial nominations and physical gas delivered is handled by the calculated flexibility.

What is the expected difference between the last IASB (at 6:40) for the gas day and the preliminary allocation between 11:15 and 14:00?

There is expected to be a low difference. However, we need to get some experience to predict how small the difference will be.

Would it be possible to forward the ASB to shippers by using edigas XML?

We will investigate if this is possible

When will the market be informed about what type of messages and formats to use for the data communication?

As soon as possible, we will strive to inform you early 2022

Is NPP applied if a shipper is misplaced as causer?


Is there a direct connection between data quality (slide 14-15 from the User Group held on 28 October 2021) and No Punishment Principle?

No not directly, No Punishment Principle is used on all quantities related to the Joint Exit Zone on the Causer Allocation Point, even though the data quality may be better than the threshold.

Would a symmetric green zone have a wrong effect on what signals Energinet send to the market in relation to which direction Energinet prefer the market to be in imbal-ance?

No, as the commercial balance will be closer to the physics than today.  Large imbalances end-of-day (outside the green zone) will be handled end-of-day. 

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.

Could it be an idea to allocate smoothing differently than proposed by for example give the shippers and individual green zone?

A separate green zone for each shipper is not in line with the network code on Balancing. We are aware of that there could be room for optimization in relation to the smoothing, but it will require some experience.

How is the Smoothing Max Value distributed among shippers?

It is based on 7 days old market share

Shippers with small customers as households might risk not “get enough” smoothing, compared to others

It is possible that single profiles could benefit less than others, as some shippers might need smoothing more than others. However, flexibility is not lost for the market, it will be included in the green zone. Also, as mentioned above, the BAM with gather experience on smoothing, and will look into possibilities of optimization, if needed.

Will No Punishment Principle be applied to all shippers for differences between pre-liminary and valid data?

No, No Punishment Principle only applies where shippers have offtake to the Joint Exit Zone and only on the Causer Allocation Point and end-of-day imbalance.

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