Balancing power
The regulating or balance power market is a tool for the Nordic TSO's (transmission system operators) to keep balance between total generation and consumption of power real time.
There are two types of participants in the balance market; the active participants and the passive participants.
The active participants are mainly producers, but also consumers who can regulate their generation or consumption on request from the TSO's. There are certain requirements to the active participants in the balance market regarding ability to regulate generation (or consumption). There is a lower limit for volume given in bids and responding time for regulation.
The passive participants are all companies connected to the central grid - and with balance agreements with one or more TSO. All consumption and production is measured in the grid and the difference between planned and measured generation and production is settled according to the prices established in the real time balancing.
The retailers selling power estimate the power consumption for their end consumers. Based upon these figures, the power is bought before hour of delivery. After the hour of operation, all accounts are settled. If the customers have used less power than estimated, the retailer has per definition sold the excess power to the system operator. The system operator pays the retailer for the power sold. In the opposite situation when consumption exceeds the estimates, the retailer automatically buys power from the system operator. The result of these trades with the system operator is that the retailer's net purchase and consumption are balanced. The power that the retailer buys or sells to the system operator is therefore called the balancing power.
The initial purchase is bought at market price while the balancing power is settled at regulating power price for the hour in question.