General overview of BALIT mechanism
In the further integration of the European electricity markets, one goal is to strengthen competition in the European adjustment mechanisms.
That is why, under the Electricity Regional Initiative France-UK-Ireland, RTE and National Grid, the UK Transmission System Operator, have developed a project to achieve the exchange of balancing services on the IFA interconnector.
The enduring phase of this project has been operational since December 1, 2010.
Since February 17, 2014, this mechanism has been extended to Spain and Portugal as part of the Electricity Regional Initiative South West Europe. This extension allows for the exchange of balancing energy between adjacent Transmission System Operators: RTE can exchange balancing energy with National Grid and REE, the Spanish Transmission System Operator, while National Grid and REE cannot exchange balancing energy between each other.
Key Economic Terms
The settlement of the offers submitted and activated by RTE is described in Section 1 of the Rules relative to Programming, the Balancing Mechanism and the Balance Responsible Entity System.
Principle of TSO to TSO exchanges
Every hour, the participating Transmission System Operators send their respective offers for the next hour. Each offer is a 50MW hourly block combined with a price in €/MWh and a direction (upward / downward). In each direction, RTE, REE and National Grid may submit up to ten offers representing a total capacity of 500MW, provided that their own system is secured and that the interconnection capacity between France and the United Kingdom or the one between France and Spain allows it.
The process relies on the use of the same IT platform by all participating Transmission System Operators. The activation process is based on the first come, first served principle.
Offers activated by RTE
Offers submitted by RTE
Every hour, for each direction , RTE draws up a capacity/price curve based on the offers from the Balancing Mechanism available for the next hour and respecting the adequate usage conditions. RTE generates its offers with the volumes available beyond its own needs, up to ten offers in each direction.
Pricing methodology for RTE's offers
Each offer is given the price of the last offer from the capacity/price curve used to build the 50MW block.