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.
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 being operational since December 1, 2010.
In 2014, the mechanism had been extended to Spain and Portugal. However, since the connection to the TERRE platform of REE, the Spanish Transport Network Operator, at the beginning of March 2020, Spain and Portugal no longer participate in this mechanism.
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 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 allows it.
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.