1. Deliverable I.4 Balancing (15th IG meeting, Paris, April 7th 2014)
-TERRE project-
(15th IG meeting, Paris, April 7th 2014)

2. Context ACER’s recommendations to ENTSO-E
Electricity Balancing Framework Guidelines (FWGL)
Promotion of coordination between TSOs regarding cross-border balancing mechanism as a necessary interim step towards the harmonization of the balancing markets in Europe and the implementation of the Electricity Balancing Network Code (NC)
ENTSO-E call of nomination for balancing pilot projects with the aim to
Gain experience in terms of implementation of inter TSO regional balancing mechanism
Test the feasibility of the balancing target model identified in the FWGL
Evaluate the associated implementation impact
The experience gained with the pilot projects will be reflected in the future developments of the NC
TERRE Pilot Project
In this framework, National Grid, REN, RTE and TERNA proposed the Trans-European Replacement Reserves Exchanges project (“TERRE Project”)

3. Scope of TERRE pilot project
Design and test the feasibility of a multi-TSO coordinated exchange of Replacement Reserve - Cross Border Balancing Energy
Participants
Terna, RTE, National Grid Electricity Transmission Plc, National Grid Interconnectors Limited, REN
Swissgrid and REE expressed their interest to the project and could join the project during the design phase
Project phases:
Design phase (started in 2014) – Currently in progress
Implementation phase (will be started between end of 2014 and beginning of – it depends on the progress of the whole aspects of the project)
TERRE design phase aims to design a solution compliant with the requirements of:
The ENTSO-E proposal of standard product
The NC (1/centralized and automatic management of XB capacities, 2/in a first step, offers based on cheapest internal bids, in a second step, all internal bids offered, 3/improved matching process)

4. Working axes Definition of the standard TERRE products (TERNA)
Definition of RR offers and RR needs
Definition of matching process and settlement procedure (RTE)
TSOs’ RR needs netting
FCFS or Implicit Auction
Marginal price or pay as bid
Financial issues (NGET)
Definition of financial settlement between TSOs
Study of the potential financial benefit
Timing and scheduling (REN)
ATC management (RTE & NGIC)
Centralized ATC management
Interaction between the ID market and TERRE process
Governance issues (All)

5. Characteristics defined by the WG AS
Updated status of the project – main achievements (1/2)
MoU and NDA covering the design phase
Signature process still in progress
Definition of the standard TERRE products
Based on the requirements of the ENTSO-E ancillary services working group (WG AS) in charge of the definition of Balancing Standard Products
All TSOs expressed their proposals on the values and constraints that each characteristic of TERRE product should respect
TERNA is merging all the proposals in order to define a common set of minimum requirements for TERRE products 1 2 3 6 5 4
Full Activation time
(from LFC-R)
Full Delivery Period
1- Request time
2- Preparation period
3- Ramping period
Characteristics defined by the WG AS
4- Min & max bid size
5- Min & max delivery period
6- Deactivation period

6. Updated status of the project – main achievements (2/2)
Definition of matching process and settlement procedure
A qualitative study has been initiated and is now under review by all TSOs: both FCFS and Implicit Auction methods are compared according to criteria
Data collection has been launched in order to assess the volumes and characteristics of balancing offers available in each country
The feasibility of a quantitative study is under investigation
Financial issues
Data collection has been launched in order to assess the potential financial benefit of TERRE
RTE has developed a balancing simulation facility tool. This tool optimizes (by applying balancing cost minimization) the selection and allocation of balancing supply quantities to address a balancing demand, taking some technical constraints into account
RTE proposed to the TERRE project group to use this for processing financial simulation. This point is under discussion.