- K O S O V A N T R A N S M I S S I O N S Y S T E M & M A R K E T O P E R A T O R - O P E R A T O R I I S I S T E M I T, T R A N S M I

S I O N I T & T R E G U T T Ë K O S O V Ë S -

Pristina

18 April 2017

Balancing of Kosovo Power System

(Balance Responsibility)

SECOND HIGH LEVEL ENERGY FORUM

Skender Gjonbalaj

Director of Market Operator Department

Content

1. What is Balancing and Balancing Mechanism?

2. Balancing the Kosovo Control Area

2

Balancing

3

∑Pgeneration = ∑Pload ∑Pgeneration + ∑Pimport = ∑Pload + ∑Pexport

Kosovo

Control Area

(KOSTT)

Balancing is the process initiated by the TSO to ensure that sum of

generation inputs and imports is as close as possible to the sum of exports

and demand from the system at transmission connected sites and distribution

zones

Synchronous system Continental Europe

Imbalance (Power sector is not balanced)

Physical reasons

• Forecasts made a day ahead can be wrong

• Generators may become unavailable

• Demand will not be constant on a minute-by-minute basis

Contractual reasons

• Trading parties will schedule to match contracts, not demand

• Suppliers may not contract to balance perfectly

• Trading parties may notice a price advantage in imbalance

4

The difference between hourly scheduled electricity deliveries and hourly

metered deliveries.

5

Balancing mechanism

Operates as a contract between TSO and Trading Parties for delivery of power (not energy)

• Payment is for energy delivered with that power

Operates as an auction to provide or be provided with that power

• Trading Parties submit bids and offers to buy or sell electricity to TSO

Trading Parties who provide power are:

Generators

Demand side

Cross border trades

is the means by which Trading Parties submit Bids and Offers to buy energy

from or sell energy to the TSO in order for the TSO to carry out the real time

Balancing of the Transmission System

6

BRP- Balancing Responsible Party

Each trading party is responsible for their imbalances

A number of small trading parties delegate their imbalance responsibility to a BRP.

• Trading parties including BRP leader benefit by aggregating their imbalances

• Balance Market cost decreases in comparison with the situation where the producer/supplier/distributor is acting as a Balance Responsible Party alone.

BRP more easily arranges its operations to correct a balance deviation

BRP pays financial compensation to TSO for negative imbalances and is compensated for positive imbalances by TSO.

is a Trading Party acting for a Balancing Group that maintains either an

Injection Account or an Offtake Account for the purposes of aggregating

imbalances and imbalance payments on behalf of the Balancing Group

Trading

parties

(BRP is

short)

TSO

(Balancing Mechanism)

BRP –balance responsible parties BSP – balance service provider

Trading parties

(BSP- offer)

€

€€

€

TSO sell

TSO Buy

TSO Buy

TSO Sell

Trading

parties

(BSP- bid)

Trading

parties

(BRP is long)

Procurement of balancing services and

settlement

• TSO is responsible for physically balancing the Transmission

System

• TSO procures or sells energy and ancillary services

• Transmission Losses

• Balancing energy, including for fulfilment of the Compensation

Program

• Reserve

• MO manages the Settlement process, including the calculation of

Energy Imbalance quantities and prices

• MO issues invoices and collects money owed to or by BRPs and

Trading Parties under the terms of the Market Rules

8

KOSTT Balancing Responsibilities

KOSTT political obstacles in balancing

process

• Two different jurisdictions – contracting

parties to the EnC

– different legal framework

– different governing institutions

– different designated operator (TSO)

– different market and technical

framework

– different price zones – market

– different tariff framework - regulated

– …etc.

9

• KOSTT is the designated Transmission system operator of Kosovo

has no proper representation within /outside ENTSO-E

• KOSTT is not yet operating as Control Area

• Unfortunately KOSTT is operating inside EMS Control Area

This status disables KOSTT to meet all its obligation to balance Power

System of Kosovo

Difficulties towards Balancing

The Kosovo power sector is small and faces challenges with:

Deficit in generation reserve capacities and adequacy

Existing inflexible old power plants which worsen the

situation

Missing balancing bids and offers in national market

Dependent on cross border balancing

Missing procedure for procurement of balancing services

10

System imbalance

NEGATIVE (short)

• injections < off-takes

• TSO will buy

POSITIVE (long)

• injections > off-takes

• TSO will sell

Party

Imb

ala

nce

NEGATIVE (short)

Contracted < metered Single Price

based on weighted

average price of accepted

offers (WAP )

Single Price

based on weighted

average price of accepted

bids (WAP )

POSITIVE (long)

Contracted > metered

Energy cost recovery –Single Imbalance Price

If there are no bids and offers the HUPEX price will be

considered for calculation of Imbalance price

Dry run implementation of Balancing mechanism

In absence of balancing Bids and Offers KOSTT has

developed the methodology for Imbalance price calculation

based on DA HUPEX price

Methodology was adopted by ERO in October 2016

Dry runs of balancing mechanism started on 01.10.2016

KOSTT is reporting to Market Parties on daily basis on their

hourly imbalances and payment obligations

Real implementation of balancing mechanism should have

started on 01.01.2017

Date for implementation was postponed to give time to parties

to modify their contracts which are based on monthly metered

volume not contracted volumes

Date is again postponed by ERO to 01.06.2017

12

www.kostt.com

Thank You