According to Article 36 of the Latvian Electricity Market Law each electricity market participant shall be liable for the fact that the quantity of electricity sold by it in each trading interval complies with the quantity of electricity delivered to the system, and the quantity of electricity purchased complies with the quantity of electricity received from the system. Thus, all Latvian electricity market participants, including those which intend to trade electricity in the Latvian bidding area of the Nord Pool Spot AS (NPS) Power Exchange, have to conclude the respective agreement on receipt of balancing services.
Taking into account that “Augstsprieguma tikls” AS (AST) as the Latvian transmission system operator (TSO) is responsible for balancing of the Latvian electricity transmission system, there are 2 options on how electricity market participant can receive balancing service:
1) To receive balancing service directly from the Latvian TSO – AST by concluding an agreement on system use and balancing (applicable to traders and with regard to balancing service – also to producers and traders) and/or system services agreement (applicable to producers and users) with AST, or
2) To receive balancing service from other electricity market participant, which has concluded the respective balancing agreement with AST as the Latvian TSO. In such case the respective market participant, which intends to receive balancing service from other market participant, has to conclude 2 separate agreements a) an agreement on system use and balancing (applicable to traders only in the part stipulating provision of/ exchange with the information regarding the transactions) or an system services agreement (applicable to producers and users who are directly connected to the transmission system) with AST as the Latvian TSO and b) an agreement on receipt of balancing services with the provider of balancing services –a market participant, which has concluded the respective balancing agreement with AST as the Latvian TSO.
If an electricity market participant, including the one, which intends to trade in the Latvian bidding area of the NPS Power Exchange, receives balancing service from another electricity market participant, the agreement on system use (for traders) or the system services agreement (for producers and users) shall stipulate the procedure on how the Latvian TSO receives information necessary for balancing the Latvian electricity system.
In compliance with the requirements of the Latvian law “On Regulators of Public Utilities” and Cabinet Regulations “Regulations Regarding Types of Regulated Public Utilities” electricity market participants – producers and traders have to register in the Latvian electricity producers or traders register respectively. Latvian electricity traders register and electricity producers register is operated by the Latvian Public Utilities Commission (www.sprk.gov.lv). Registration in the respective register is the prerequisite for concluding the respective agreement(s) with the Latvian TSO. For conclusion of the agreement with the user, the user’s electrical installation has to be connected to the transmission system and it has to operate in the electricity market in accordance with the principle of voluntary participation.
An agreement with the respective electricity market participant is concluded in accordance with the standard sample agreement, which is placed on the AST home page, since according to the applicable laws the TSO has to ensure equal treatment of all electricity market and system participants.
Standard Agreement on System Use and Balancing (regarding theservice related to provision of/ exchange with the information regarding the transactions applicable only to traders, however, regarding the balancing service – applicable to traders, producers and users)
Electricity market participants who are planning to trade electricity within the Latvian-Russian Import (LRI) and Export (LRE) bidding areas are expected to conclude with AST an Additional agreement to the System Use and Balancing Agreement.
Balancing service to electricity market participants is the service where, on the one hand, the TSO provides balance of each electricity market participant in real time and, on the other hand, each electricity market participant undertakes financial responsibility in front of TSO for deviations from its balances in each trading interval.
Energy trader via email submits electric energy trade plans for each trading interval for day, month, year to TSO, according to Standard data exchange form.
Upon signing an Agreement on System Use and Balancing new electricity traders are assigned Energy Identification Code (EIC) for data exchange within the internal energy market. More on EIC can be found here.