The fundamental responsibility of the transmission system operator TSO is to provide the transmission system services and to ensure the reliability and stability of the transmission system, including ensuring the continuous balancing of electricity generation and consumption in the power grid. System frequency is the indicator of balance between consumption and generation, but as the Baltic States are currently operating in a single synchronous area with UPS (Unified power system of Russia), according to BRELL (Belarus, Russia, Estonia, Latvia and Lithuania) agreements, the electricity system’s primary frequency regulation is ensured by the Unified Russian power grid, in which the frequency in the normal operating mode should be in the range of 49.95 and 50.05 Hz. In turn, the Baltic power system's transmission system operators support the provision of a stable frequency in the BRELL power grid, ensuring the deviation (area control error) of each country's power grid within the range allowed by mutual agreement.
In order to balance generation with consumption within real-time, the transmission system operator needs balancing resources - the ability to regulate generation and, in some cases, consumption, in real time. In order to increase the security of electricity supply, facilitate the availability of balancing resources, increase the efficiency of balancing resource usage and reduce balancing costs, the Baltic transmission system operators have started the operation of a common Baltic balancing market since 2018. In Latvia, AS "Augstsprieguma tīkls" in cooperation with the TSOs of Baltic coordinated balancing area, provides balancing by using the available manual frequency restoration reserves in the Baltic balancing market and cooperating with the open balancing service provider.
The Baltic TSOs mutual agreements and agreements with third parties foresee the following principles and conditions:
- Baltic transmission system operators organize and manage the operation of the common Baltic balancing market and perform balancing in a coordinated balancing area with the aim of reducing the overall imbalance of the Baltic system.
- Baltic TSOs mutually buy / sell the electricity surplus / shortage in power systems of Estonia, Latvia and Lithuania that can be eliminated (compensated) within the Baltic coordinated balancing area (Netted imbalance).
- The part of the imbalance that cannot be eliminated (compensated) within the Baltic coordinated balancing area (Not-netted imbalance) is bought / sold by the Baltic TSO to the Open Balancing Service Provider – AB “INTER RAO Lietuva” at its predetermined prices at the relevant imbalance settlement period, which is based on the Russian electricity market price, infrastructure payment, capacity payment, transit fee and other justifiedcosts.
AS “Augstsprieguma tīkls” provides balancing service for electricity consumers, as well as to electricity producers and traders. In order to receive the balancing service from the TSO, the relevant agreements shall be signed between parties (for more details, see here). The TSO performs balancing calculations in an open and non-discriminatory manner for all recipients of the balancing service in accordance with the requirements of the Electricity Market Law and the Network Code. Consumers and producers, who are market participants, and electricity traders are required to pay for balancing service, the amount of which is determined based on the TSO data.
The detailed information regarding the Baltic balancing market framework and imbalance settlement principles can be found in the attached documents, which are public annexes of Baltic TSOs’ Agreement on the operation and settlement of the Baltic coordinated balancing area:
- Baltic balancing market rules
- Baltic CoBA imbalance settlement rules
- Used definitions and abbreviations
Actual information and data on the functioning of the Baltic coordinated balancing area and Baltic balancing market further on will be available on the Baltic coordinated balancing area website: https://dashboard-baltic.electricity-balancing.eu/.
Additional information on the development of the Baltic balancing market can be found in the Baltic market development section.
Historical electricity imbalance prices