Balancing regime
GTS’s network must always be in balance, which is why entry and exit volumes must also always be equal to each other. The rules set out on the balancing regime web pages explain how GTS keeps its network in balance.
Please be aware that if your portfolio is not balanced, this may involve considerable financial consequences. This webpage contains a broad outline of the current balancing regime and market model that became effective on 1 April 2011 and has been changed on some aspects on 3 June 2014 to comply with the European Network Code.
A market-based balancing regime
The gas transport network has to be in balance so that gas can be transported safely and effectively. 'In balance' means that the transport network remains at the correct pressure and that the overall volume of gas withdrawn from the network matches the volume fed in and vice versa.
Each market party is responsible for the volume of gas it withdraws or feeds in, which means that market parties also share responsibility for maintaining the balance of the transport network. Parties are aware of their own position at all times and are therefore able to contribute to keeping the transport network in balance. The total balance of the national grid as a whole, or the sum of the positions of all parties, can also be monitored 24/7 by everyone.
As long as the position of the network as a whole remains within the permissible limits (dark green zone), the transport network is in balance and none of the parties needs to take any action. If the transport network as a whole gets out of balance, market parties can intervene themselves by feeding in or withdrawing gas from the transport network. If such action is not sufficient and the imbalance becomes too great, a market-based correction mechanism comes into play and we, as national network operator, will buy or sell some gas. The imbalance position of the market parties causing the imbalance is partly corrected by activating the market-based correction mechanism. The market parties causing the imbalance pay for the cost of the gas needed to resolve the imbalance.
In the case of unwanted balancing behaviour, a financial charge will be applied. If there is substantial undesirable balancing behavior, the shipper's license can be revoked.
How does this work in practice and can you provide more detail?
Before the gas day begins, shippers send GTS a programme showing their predicted hourly entries, exits and TTF deals for the next day. Shippers who supply to small-scale users apply a damping formula to the programme enabling them to feed in gas according to a pattern which is comparable to the exit programme damped pattern.
During the gas day, we compare this programme with the actual allocation based on near-real-time data to determine hourly portfolio imbalances. The hourly imbalances calculated for each portfolio are added to the portfolio imbalance signal (POS). The POS is shared with market parties on an individual basis. The sum of all the individual POSs is known as the System Balance Signal (SBS) and is published on the same timescale as the POS.
We monitor the SBS and take corrective balancing action if required. If the SBS is not zero, it indicates an imbalance in the system. The imbalance area is divided into zones. If the SBS is in the dark green zone, no balancing action is required. However, if the SBS is in the light green, orange or red zone, a correction mechanism is triggered and gas is bought or sold on ICE Endex’s Within-Day Market. We call this a balancing action, or within-day balancing action (WDBA).
This balancing regime has no fixed balancing period. Portfolios may be short or long for some time without any consequences, provided that the SBS remains in the dark green zone.
Would you like to read the full terms and conditions? The balancing regime is described in the Transmission Code Gas TSO.