ACER’s monitoring shows broad implementation of the electricity imbalance settlement harmonisation methodology across the EU

Today, ACER releases its first interactive dashboard on monitoring the implementation of the Imbalance Settlement Harmonisation (ISH) methodology.

What is the ISH methodology?

The ISH methodology, introduced in 2017 by the Electricity Balancing (EB) Regulation and approved by ACER in 2020, aims at harmonising the main features of electricity imbalance settlement across the EU.

Each Transmission System Operator (TSO) calculates the difference between the forecasted and actual electricity consumption or production for each Balance Responsible Party (BRP) in its area. By identifying these imbalances, BRPs can take actions to support the power grid’s balance, helping to maintain or restore the balance between electricity supply and demand.

With the implementation of the ISH methodology, the TSOs were required to harmonise the main features of the imbalance settlement:

• Imbalance calculation, including its position, actual allocated volume, and imbalance adjustment.
• Main components for calculating the imbalance price. Additional components such as scarcity, incentivising, and connecting TSOs’ financial neutrality may also be used if approved by the NRA.
• Use of single or dual imbalance pricing:
  • Single (EU’s target model): imbalances are settled at a single price, regardless of whether they result from excess supply or excess demand. This pricing incentivises BRPs to help restore the system’s balance.
  • Dual: different prices apply for positive (excess supply) or negative (excess demand) imbalances. This pricing incentivises BRPs to maintain their own balance.

Why is the harmonisation of ISH aspects important for the electricity market?

Harmonising these aspects across EU Member States creates a more integrated and efficient electricity market. It ensures that imbalance prices accurately reflect real-time energy values, provides consistent incentives for market participants, and enhances the transparency and efficiency of balancing markets. This, in turn, supports the stability and reliability of the electricity grid, key for meeting the EU's energy goals and transitioning to a sustainable energy future.

What did ACER monitoring find?

ACER’s 2024 monitoring exercise evaluated the implementation degree of each ISH methodology feature by each TSO. The analysis is based on the data received from the TSOs of 23 EU Member States (the methodology is not applicable in Malta and Cyprus, while Austria and Bulgaria did not submit their data).

The ACER monitoring found:

• The ISH methodology has been fully or largely implemented in nearly all observed Member States (22).
• 5 TSOs do not use any additional components, 19 TSOs (from 16 Member States) are using one or more additional components, and 2 TSOs are in the process of implementing the use of additional component/s.
• 20 TSOs (from 17 Member States) use single imbalance pricing, 5 TSOs use dual pricing while 1 TSO is in the process of implementing the use of dual pricing.

What are the next steps?

In the coming months, ACER will continue to check the implementation status of Terms, Conditions and Methodologies (TCMs) of the:

• Electricity Balancing (EB);
• Capacity Allocation and Congestion Management (CACM);
• Forward Capacity Allocation (FCA); and
• System Operation (SO).

The information collected will be the foundation of ACER’s implementation monitoring dashboards (the next expected in 2025). Relevant stakeholders will be notified in due time about when and how to submit their data.

What else is new?

Have you checked ACER’s updated Electricity Balancing TCMs monitoring webpage? It offers a clear, colour-coded overview of each TCMs’ implementation status, complete with useful links and key dates.