First ACER report on the implementation of the Balancing Network Code available online

LinkedIn LinkedIn Copy Link Copy Link

 

 

​The Agency publishes today its first Report on the implementation of the Balancing Network Code (‘Code’). The Report describes the status of the implementation and application of the Code across the EU Member States. The Code is applicable since 1 October 2015.The Report’s main objective is to assess progress in the Code implementation and the effectiveness of the balancing regimes, based on the best information available to the Agency during the compilation of this Report.         

Rules on gas balancing aim at facilitating gas trading across EU balancing zones and at contributing to the development of short markets, including market liquidity. Union-wide rules on balancing have the objective to create an appropriate environment for network users to manage their balance positions in the different balancing zones of the Union in an economically efficient and comparable way.          

Main findings of the Report:

          
  • Certain legal interpretations of the Code do not take into account the intent of the Code and its main objective, which is to deliver functioning short term wholesale markets. The terminology of the Code is not used consistently across EU Member States, leading to varying interpretations and inconsistent national implementations.
  • Implementation optionality and flexibility undermine the intent of the Code. While their intent was to reflect local constraints, the current options offered by the Code triggered inconsistent implementation and delays. The delays mainly apply to the countries opting for interim and/or transitory measures.
  • Full implementation is not yet achieved and will require further effort across the EU. While the challenge is greater for countries that have not yet enabled short term markets, most countries show some degree of incompliance and/or inconsistent implementation. 
  • The implementation frontrunners are the United Kingdom, France , Belgium, Denmark, Germany, the Netherlands and Poland. 
  • The Report found Bulgaria, Romania and Greece to be significantly behind. In these countries market facilitation shall be revised and put on track to create the conditions for a market based balancing. 
  • Interim measures countries are advised to keep track annually of the deliverables that would results in a full implementation of the Code by 2019. These annual reviews in most cases suffer delays and are not on track.
  • Member States where the national implementations were foreseen by 1 October 2016, will be closely reviewed in the next edition of the Report. Spain made a good progress within this group.

Main recommendations:

 

  1. Regulators and stakeholders in each country should regularly monitor progress. Communication must be improved between stakeholders and regulators within countries. Stakeholders and regulators must regularly assess the progress made in implementing the Code and reflect on local market development to deliver the best possible outcomes for these markets and ultimately for the consumers. NRAs have an important role to play in this process. They shall take responsibility when evaluating policy options against each other within the local market conditions to deliver the best possible outcomes for the network users and consumers. Formal compliance with the provisions of the Code is not necessarily the end of balancing regime development, given that the market environment will continuously evolve.         

  2. It is necessary to improve knowledge sharing and dialogue across the EU. Best practices in creating liquid short-term markets must be shared across the EU, possibly with the support of the Agency and ENTSOG. This dialogue shall also take account of the evolution of the growing local markets.         

  3. European Commission may consider taking enforcement actions in the coming years. The observed slow implementation of the Code will be reassessed in the next edition of the Report. Delays in the implementation of key features of the Code may justify enforcement or infringement processes initiated by the European Commission.         

​The Report can be found here.      
          

The Technical Annex can be found here​.     

Links:       

Early Implementation Reports         

ACER-​ENTSOG Report on the early implementation of the Balancing Network Code (BAL NC) on 22 October 2014        

Second ACER-ENTSOG Report on the status of the implementation of the Balancing Network Code​ on 5 November 2015        

Background:      

The current Report explores the effectiveness of the balancing regimes in achieving a market-based approach to balancing. It uses a detailed assessment methodology consistently applied to each national balancing regime. It provides conclusions and recommendations across the EU, for the policies considered and per country evaluated.          

The ACER-ENTSOG 2014 Report on the early implementation of the Balancing Network and the Second ACER-ENTSOG 2015 Report on the status of the implementation of the Balancing Network Code assessed the legal implementation of the provisions in the Balancing Network Code (Regulation (EU) No 312/2014). These reports revealed that the implementation of the Code was progressing along multiple time schedules and along several options.          

The Code was published in Commission Regulation (EU) No 312/2014 of 26 March 2014. It foresees three implementation timelines: 1 October 2015, 1 October 2016 and 16 April 2019.