Balance Responsible Party (BRP)

The main role of the balance responsible party (BRP) is to maintain equilibrium between supply and demand on the energy grid. If actual consumption or production differs from the forecast, imbalances occur that must be corrected due to the unique nature of electricity, which cannot be easily stored. The BRP is financially responsible for resolving any imbalance with the connecting TSO.

The BRP can be a producer of electricity, a major consumer, or a trader of electricity. These grid-connected parties are responsible for informing grid operators of their planned production, consumption of energy, and associated grid transportation requirements.

If the actual consumption or production differs from the forecast, imbalances occur which must be corrected. This is because of the nature of electricity as a unique commodity that cannot be easily stored, and therefore the supply must at all times be equal to demand. At the end of the day, the BRP is responsible on a financial level for the imbalance that must be resolved with the connecting TSO.

How does balancing occur in practice?

Suppliers and consumers of electricity have contractual agreements that describe the amount of power being bought and sold. In practice, however, those amounts can and do differ from what is actually produced or consumed. These discrepancies must be solved in the intraday markets to ensure the stability of supply. The grid operator uses the system of balancing responsibility to achieve this. All market participants are responsible for the imbalances that they cause in the system. Those participants are financially responsible for the imbalances that occur and are incentivized to be balanced at all times. Depending on the state of the system, an imbalance charge is imposed on the BRPs that are not in balance. An imbalance charge or imbalance settlement is designed to recover the costs of balancing the system. This includes incentives for the market to reduce imbalances and transfer the risk of imbalances to the BRP. 

The European target model set in the EU regulation aims at ensuring that BRPs are exposed to market price signals as much as possible. Imbalance pricing is directly linked to the system needs since all BRPs, irrespective of their imbalance, are exposed to the same imbalance price and therefore they are incentivized to support the system´s imbalance by reducing the TSO demand for balancing energy. 

Example

Consider the following scenario to demonstrate how a BRP works. An electricity supplier purchases his power from a solar farm in an over-the-counter deal on a state holiday. In this example, there is little home demand because everyone is outside, but lots of production because solar is producing more than average.

Assume that the supplier is also a BRP, and his balancing group comprises the injection from the solar farm, offtake from connected households, and trades on the power market with other BRPs. He is always in charge of its balance. The amount of energy consumed is too low for the projected levels of production from the solar farm. At the same time, there may be another BRP that consumes more energy than necessary.

This could be because of high demand by a factory in the balancing group or an outage at an energy production plant. Both BRPs may exchange power to balance the difference and as much as feasible in the power trade. It's possible that balancing an energy surplus or deficit is more cost-effective than taking action in the balancing group.

Independent Aggregation

Independent aggregation means letting a flexibility aggregator manage and steer energy even if they are not the BRP. This opens the market and makes it easier to offer flexibility services for independent providers as opposed to large energy companies that steer their own devices. the benefit for the overall market is that the supply of ancillary services providers will increase thereby lowering costs. Nano energies supports independent aggregation as a means of increasing competition and lowering energy prices for all consumers.

Do you want to become part of the Nano energies aggregation group and start earning more revenue for your energy assets? Contact us to create a risk-free source of income with no up-front expenses while engaging in grid-balancing services.

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