ESO permitted to delay entry to European balancing platform

Ofgem has granted a derogation to National Grid Electricity System Operator (ESO) from an EU regulation requiring the body to starting using a new European balancing platform by 15 January 2020.

The Trans-European Replacement Reserves Exchange (TERRE) will allow transmission system operators (TSOs) to procure replacement reserves from interconnected neighbours.

The platform is officially due to launch in December. However, all but one of the initial participants have decided to delay entry to the market after RTE – the TSO in France – requested a 12-month derogation from the January deadline. The request was granted by the French energy regulator CRE in September.

Britain currently has three operational electricity interconnectors to continental Europe – one each to France, Belgium and the Netherlands. But neither Belgium nor the Netherlands will be among the first countries to join.

This means that Britain will initially only be able to access the exchange through France. With this in mind, the ESO requested a matching derogation from Ofgem in June.

The regulator has now granted the derogation, but not for the full 12 months which the ESO requested.  Ofgem noted that, despite securing a year-long stay, RTE expects to be ready to use the platform by June 2020.

It also cited CRE’s decision which said RTE should connect the platform by June 2020 so that neighbouring TSOs can carry out trades passing through France, even if it is not able to participate itself.

Ofgem has therefore granted derogation until whichever of the following dates comes soonest: 30 June 2020; the date when RTE starts using the platform; or the date when RTE connects to the platform.

It also requested that the ESO provide monthly updates on the implementation of the platform in both Great Britain and France in the meantime and complete the accompanying reforms to the balancing mechanism by December.