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Glossary · Energy industry & energy transition

Electricity Balancing Guideline

Electricity Balancing Guideline balancing energy EU electricity market frequency maintenance Balancing group

The Electricity Balancing Guideline, abbreviated EBGL or GL EB, is a piece of European legislation on balancing electricity systems. Its legal basis is Commission Regulation (EU) 2017/2195 of 23 November 2017 "establishing a guideline on electricity balancing". It entered into force on 18 December 2017 and, as a regulation, applies directly in all EU Member States. Several consolidated versions now exist. The EBGL lays down the principles according to which transmission system operators (TSOs) procure, activate and settle balancing reserves. It also governs how balancing energy is exchanged across borders and how balance group imbalances are settled. It is not concerned with the long-term expansion of power plants or grids, but with the very short-term correction of deviations between injection and withdrawal.

Physically, injection and withdrawal must match at every moment. If more electricity is withdrawn than is injected, the frequency falls. In the case of a surplus, it rises. In the continental European synchronous system, the target value is 50 hertz. Small deviations are normal. Larger ones endanger the synchronous operation of generators, consumers and grids. The EBGL structures the area in which this physical necessity meets market rules, balance responsibility and European cooperation. The technical rules of grid operation itself, for example on reserve types and dimensioning, are largely set out in Regulation (EU) 2017/1485 (System Operation Guideline, SOGL). The EBGL refers to it in many places.

Terms: balancing capacity, balancing energy, imbalance energy

In the German version of the regulation, several terms must be clearly distinguished. Balancing reserves means the provision of balancing energy and/or balancing capacity. Balancing capacity (German: Regelleistung; Balancing Capacity) is capacity held available, in megawatts: a provider undertakes to submit bids for balancing energy for a specified period. Balancing energy (German: Regelarbeit) is the energy, in megawatt-hours, that a balancing service provider actually delivers and that the TSO uses for system balancing. Example: a provider that holds 10 MW of balancing capacity and is fully called for 15 minutes delivers 2.5 MWh of balancing energy.

By contrast, imbalance energy (German: Ausgleichsenergie) in German usage means the opposite side, namely the settlement of balance group imbalances. The older wording that the EBGL governs the cross-border exchange of "Ausgleichsenergie" is therefore imprecise. What is exchanged across borders is balancing energy. Balance responsible parties pay or receive an imbalance price for their deviation. The umbrella term control energy (German: Regelenergie) is often used in practice for both.

Balance group and settlement of imbalances

The EBGL builds on the logic of balance groups. A balance group is a computational account in which injections, withdrawals and trades are consolidated. Suppliers, direct marketers and other market participants bear balance responsibility: their schedules should match actual injection and actual consumption as closely as possible. Deviations nevertheless occur, for example due to forecast errors for wind and photovoltaics, power plant outages or unexpected consumption behaviour.

The TSO corrects these deviations technically at once, because the frequency cannot wait. Afterwards, it settles each balance group imbalance for each imbalance settlement period at the imbalance price. This is intended to give balance responsible parties an incentive to keep their balance group efficiently balanced or to contribute to stabilising the system. The costs of the correction are not meant to end up lump-sum with the system as a whole. Under Article 53 EBGL, all TSOs had to settle balance group imbalances in 15-minute intervals within three years of entry into force. The Internal Electricity Market Regulation (EU) 2019/943 confirms this: from 1 January 2021, the 15-minute interval applies, unless regulatory authorities have granted an exemption. Exemptions were possible only until the end of 2024.

Reserve types and European platforms

Europe distinguishes the frequency containment reserve (FCR), the frequency restoration reserve with automatic (aFRR) and manual activation (mFRR), and the replacement reserve (RR). For the exchange of balancing energy, the EBGL provides for common European platforms, each of which has an activation optimisation function and a settlement function between the TSOs:

  • PICASSO for balancing energy from aFRR. The platform went into operation on 1 June 2022. Cross-border exchange began on 22 June 2022, when the four German TSOs and the Austrian TSO APG joined.

  • MARI for balancing energy from mFRR. The technical go-live was on 15 September 2022, and the market go-live on 5 October 2022 with the Czech TSO ČEPS and the German TSOs.

  • TERRE for replacement reserves. It is relevant only for TSOs that use an RR process, and has been in operation since 2020.

  • The Imbalance Netting platform (IGCC). It offsets opposing imbalances of neighbouring control areas, so that both sides do not activate balancing energy in opposite directions.

According to ENTSO-E, with the launch of MARI and PICASSO alongside TERRE and IGCC, the European target architecture for balancing was implemented. Further TSOs have been joining step by step since then. For FCR, there is no such platform for balancing energy, because it is activated automatically and in a decentralised manner via the frequency deviation.

Activation, price formation and grid limits

Balancing service providers submit bids for positive balancing energy (more injection or less consumption) or for negative balancing energy (less injection or more consumption). The platforms sort the bids by price in common merit order lists. They activate the cheapest bids that are technically available and whose energy can be transmitted. The price of balancing energy follows a harmonised methodology under Article 30 EBGL with marginal pricing. Bids that are activated for internal congestion management must not determine the marginal price. No additional charges may be levied for the use of cross-zonal transmission capacity when exchanging balancing energy, apart from possible loss compensation.

After the cross-zonal intraday trading gate closure, the TSOs continuously update how much cross-border capacity is available for balancing energy. A cheap bid in a neighbouring country therefore helps only if no congestion prevents delivery. Coordination thus does not automatically reduce costs in every quarter-hour. It does, however, enlarge the pool of offers. In 2022, for example, ENTSO-E reported high cross-border marginal prices in connection with high day-ahead prices. Some TSOs therefore postponed their accession.

Distinction from trading, redispatch and security of supply

Day-ahead and intraday trading serve to buy or sell electricity volumes before delivery. Under the understanding of EU law, TSOs should use the balancing reserve market only to balance the imbalances that still remain after intraday market gate closure. Redispatch, by contrast, changes the injection of individual plants in order to resolve grid congestion, even where the system as a whole is balanced in accounting terms. The same plant can be used for both purposes, but the objectives remain different. The EBGL also contributes to operational security, but does not secure long-term security of supply: it provides no investment signals for firm capacity, grid expansion or storage.

Responsibilities and access for flexibility

The TSOs are responsible for implementation in operation. They develop proposals for methodologies, for example for standard products, price formation, capacity allocation and settlement. The national regulatory authorities approve these methodologies, in Germany the Bundesnetzagentur. For Europe-wide methodologies, ACER decides if the regulators cannot agree or if responsibility lies directly with ACER. ENTSO-E coordinates the work of the TSOs and reports, for example, on the costs of the platforms.

For providers of flexibility, the EBGL is particularly important. Besides conventional power plants, battery storage, industrial loads, electrolysers, aggregators, heat pumps or charging infrastructure now come into question. Whether they can participate depends on prequalification, minimum bid sizes, activation times, metering requirements and settlement processes. The EBGL sets the European framework and the characteristics of the standard products. How accessible the market actually is, however, is decided only in national implementation and at the platforms.

Typical misinterpretations

  • "Balancing is only an emergency reserve." Balancing energy is needed constantly every day, because forecasts, consumption and schedules never match reality exactly.

  • "European integration means central grid operation." The EBGL creates common rules and platforms. National control areas and the system responsibility of the TSOs remain in place.

  • "High or low prices prove the success or failure of the energy transition." Prices for balancing energy and imbalance energy reflect short-term scarcity, product design, competition, weather and grid constraints. They show where short-term flexibility is valuable, but say little about long-term system costs.

With more weather-dependent generation and advancing electrification, the EBGL is becoming more important. The need for balancing energy does not automatically grow in the same proportion, however: better forecasts, quarter-hour products, storage and controllable loads can reduce imbalances or balance them at low cost. The EBGL therefore does not simply mean "control energy in Europe". It is the regulatory framework for how short-term imbalances are technically managed, economically valued and institutionally governed.

Sources

Related glossary entries

Edited by eCMS on 11.11.2026 19:43

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