The Nordic Council of Ministers has for several years supported the development of an integrated Nordic electricity market. The Council of Ministers gave their support to the report on common consumers and other end users in the electricity market, including a common Nordic imbalance settlement solution, by the Nordic energy regulators (NordREG). In 2010, the national TSOs – Fingrid, Svenska Kraftnät, Statnett, and Energinet.dk – decided on the establishment of the Nordic Imbalance Settlement (NBS) project in order to develop a common Nordic imbalance settlement model. The Danish TSO, Energinet.dk, left the project during the planning stage. However, it works in cooperation with the project and may join the Nordic imbalance settlement at a later stage. The planning stage of the project was completed in 2011. As the situation currently stands, the Nordic imbalance settlement model would be introduced in the autumn of 2016 in all three countries.
A common operational unit, eSett Oy, was founded to carry out imbalance settlement in electricity markets across the three countries, whose operations will initially be supported by Fingrid Oyj. eSett Oy is jointly owned by the three national TSOs. The common Nordic imbalance settlement process will replace the various country-specific settlement procedures. The aim is to determine the power balance of each market participant on an hourly basis, based on its electricity production, procurement, consumption and sales. The distribution service operators (DSOs) and other market participants will complete imbalance settlements according to this model, and TSOs are responsible for doing so at a national level.
In addition to improving the end user market, the Nordic imbalance settlement model is intended to act as a forerunner and an example at the European level. Its objective is to provide harmonised and well-functioning operational preconditions for all BRPs, regardless of country or price area, as well as similar standards and rules for information exchange among all market participants. Common and simplified practices for BRPs will make it easier for operators to enter the market, increase competition and lower costs, as market participants will have more BRPs to choose from.
Read our next energy blog out in March. In this blog, our expert Jukka Ohtonen will answer the question: ‘ Nordic imbalance settlement – what is changing? ’ Get to know the rest of the Fondia energy team here:http://www.fondia.com/expertise/energy.