Appendix 1: Agreement on balance responsibility.
Appendix 2: Guidelines on the rules in chapters 3-6.
The regulation is published by Energinet.dk and is available from:
Energinet.dk Tonne Kjærsvej 65 7000 Fredericia Denmark
Tel. +45 70 10 22 44
The regulation can be downloaded from www.energinet.dk in the main menu 'Electricity' under 'Regulations', 'Market regulations'.
1. Terminology and definitions
1.1 PO Production (purchase obligation)
Electricity generated at local CHP plants with a maximum capacity of 5 MW and renewable energy (wind turbines and various kinds of biomass, biogas and photovoltaic cells), which Energinet.dk is obliged to purchase at statutory prices.
1.2 Market participant
General term for parties, with the exception of customers and third parties, operating in the elec-tricity market, ie grid operators, balance suppliers, balance responsible parties (BRPs), transmis-sion operators and transmistransmis-sion system operators (TSOs).
1.3 Notification
A notification is the balance responsible party's set of trading schedules (purchase/sale of electrici-ty in MWh per hour) submitted the day before the day of operation.
1.4 Working days
Working days as defined in Regulation D1: 'Settlement metering', appendix 3: 'Definition of work-ing days'.
1.5 Balance responsibility
The individual market participant's responsibility for deviations between notification and actual consumption/production at a number of metering points.
1.6 Balance responsible party (BRP)
A market participant approved by and party to an agreement with Energinet.dk regarding assump-tion of balance responsibility. Agreement on balance responsibility can be found in appendix 1.
1.7 Balancing power
Balancing power is the difference between the notification and the actual operating state. The ex-change of balancing power between market participants is managed by Energinet.dk for the pur-poses of balance settlement.
1.8 DataHub
An IT platform owned and operated by Energinet.dk. The DataHub handles metered data, master data, required transactions and communication with all market participants in the Danish electricity market.
1.9 Electricity supply grid
General term for public grids and direct electricity supply grids as defined in the Danish Electricity Supply Act (Elforsyningsloven).
1.10 Balance supplier A company which:
1) Energinet.dk has included as balance supplier in the DataHub 2) and
- sells electricity to customers and holds balance responsibility for the metering point, or - buys electricity from producers and holds balance responsibility for the metering point.
1.11 Balance responsible party for consumption (BRP for consumption)
A BRP holding balance responsibility for consumption, including grid losses. The BRP for tion also holds responsibility for agreements on the physical electricity trading related to consump-tion for the metering points for which the BRP for consumpconsump-tion is responsible.
1.12 GSRN no.
Global Service Relation Number. Unique 18-digit identification number for a metering point. Also known as a metering point ID.
1.13 Balance responsible party for trade (BRP for trade)
A BRP exclusively holding balance responsibility for physical electricity trading (a trader).
1.14 Credit line
The market participant's expected maximum outstanding balance (in connection with balance set-tlement) against Energinet.dk at normal settlement frequency.
1.15 Credit insurance
An insurance policy which companies can take out with an insurance company, thus ensuring that they receive the amounts owed to them by their customers.
1.16 Customer
The person(s) or entity(ies) that use a metering point and therefore are entitled to conclude legally binding agreements for this metering point, ie entitled to change supplier, report a move-out for the metering point etc. A customer can either be a legal or physical person.
1.17 Metered data collector
The metered data collector responsible for a given metering point is the grid operator in whose area the metering point is located.
1.18 Metering point
A physical or defined (virtual) point in the electricity supply grid where electrical energy is metered, calculated as a function of several readings or estimated. Classified as consumption, production or exchange metering point. A metering point is the smallest unit in the electricity market when calcu-lating electrical energy for customers and market participants. A metering point is identified by a GSRN no.
1.19 Grid area
A specific delimited area for which a licence has been granted to conduct grid activities under the Danish Electricity Supply Act and which is delimited against the adjacent electricity supply grids with 15/60 meters that are included in the DataHub's computations in the electricity market.
1.20 Grid operator
Company licensed to operate distribution grids.
1.21 Balance responsible party for production (BRP for production)
A BRP holding balance responsibility for production. The BRP for production also holds responsibility for agreements on the physical electricity trading related to production for the metering points for which the BRP for production is responsible.
2. Objective, scope and regulatory provisions
2.1 Objective, scope and statutory authority of the regulation
Under Section 7(1) of the Executive Order on transmission system operation and the use of the electricity transmission grid etc.1 (Executive Order on transmission system operation (Systemans-varsbekendtgørelsen)), this regulation has been prepared following discussions with grid operators and balance suppliers. It has also been subject to public hearing before being registered with the Danish Energy Regulatory Authority.
The regulation sets out rules on and terms of balance responsibility.
The regulation is primarily aimed at market participants that have already signed or want to sign an agreement with Energinet.dk in order to become a balance responsible party (BRP). The regula-tion is also aimed at all parties which are basically qualified to become BRPs, eg balance suppliers, grid companies and electricity generators, as well as balance suppliers in general.
Finally, the regulation also defines which information is required in order for Energinet.dk to carry out its tasks in relation to balance responsibility and which the market participants are therefore obliged to provide to Energinet.dk on request; see Section 84(5) of the Danish Electricity Supply Act2.
This regulation is effective within the framework of the Danish Electricity Supply Act.
2.2 Statutory authority
The regulation is issued under the authority of Section 28(2), item 13, and Section 31(2) of the Danish Electricity Supply Act as well as Section 7(1), item 4, of the Executive Order on transmis-sion system operation.
2.3 Complaints
Under Section 7(3) of the Executive Order on transmission system operation, complaints about the regulation can be lodged with the Danish Energy Regulatory Authority, Carl Jacobsens Vej 35, 2500 Valby, Denmark.
Complaints about how Energinet.dk has enforced the provisions of the regulation can also be lodged with the Danish Energy Regulatory Authority; see Section 31(4) of the Danish Electricity Supply Act.
If decisions made by Energinet.dk result in the deregistration of a market participant as a user of the DataHub, the market participant which the decision concerns can also demand that such deci-sion be brought before the courts; see Section 31(5) of the Danish Electricity Supply Act.
Questions regarding the enforcement of the provisions of the regulation can be directed to Ener-ginet.dk.
1Executive Order no. 891 of 17 August 2011 on transmission system operation and the use of the electricity transmission grid etc.
2 Consolidated Act no. 1329 of 25 November 2013 as amended.
2.4 Effective date
This regulation comes into force on 1 April 2016 and replaces Regulation C1: 'Terms of balance responsibility', 27 January 2014. This regulation is supplemented by appendix 1, 'Agreement on balance responsibility'.
Questions and requests for additional information can be directed to Energinet.dk's contact for this regulation as stated on Energinet.dk's website www.energinet.dk. The regulation is registered with the Danish Energy Regulatory Authority according to the rules set out in Sections 73 a(3) and 76(3) of the Danish Electricity Supply Act, Section 1 of the Executive Order on grid companies', regional transmission operators' and Energinet.dk's methods for determining tariffs etc. (Metodebekendtg-ørelsen)3 and Section 7(2) of the Executive Order on transmission system operation.
3 Executive Order no. 1085 of 20 September 2010 on grid companies', regional transmission companies' and Energinet.dk's methods for determining tariffs etc.
3. Balance responsibility in general
A BRP must be linked to all production and consumption metering points as well as to all physical electricity trading.
A BRP must have entered into an agreement on balance responsibility with Energinet.dk which has not been terminated.
The BRP is responsible in relation to Energinet.dk for:
- deviations between reported trading schedules and actual consumption/production for the me-tering points for which the BRP holds balance responsibility.
- costs relating to the purchase of balancing power which Energinet.dk, in its capacity as trans-mission system operator, must make in order to uphold the balance.
Basically, consumers, generators and balance suppliers are responsible themselves for balancing their own consumption, production and electricity trading. This also applies to grid operators, which, as a starting point, hold balance responsibility for grid losses in their own grid.
All parties operating in the electricity market that have not entered into the 'Agreement on balance responsibility' with Energinet.dk and thus do not undertake balance responsibility for their own activities are obliged to assign their balance responsibility to an approved BRP subject to agree-ment with such BRP.
There is one balance supplier and one BRP for each metering point. A balance supplier can have only one BRP for all consumption metering points in a grid area.
There are three types of BRPs:
- BRPs for consumption - BRPs for production - BRPs for trade.
In the DataHub, the BRP's identity is only visible to the balance supplier. Similarly, only the balance supplier can see the complete master data for the customers handled by the balance supplier. The BRP does not have access via the DataHub to data for the metering points for which the BRP holds balance responsibility, but if a specific need arises, the BRP may ask Energinet.dk for an extract.
The BRP will not be notified via the DataHub when the metering responsibility for a metering point is transferred to or from the relevant BRP as part of a change of supplier, move-in/move-out etc.
The BRP will, however, receive a message from the DataHub about general changes of balance responsibility, ie when a balance supplier changes BRP for a number of metering points as part of an overall change of BRP.
The BRP can only be exempted from assuming balance responsibility under the terms and condi-tions of this Regulation C1 and the 'Agreement on balance responsibility'.
4. Approval of BRPs
A BRP must meet the following requirements in order to be approved as a BRP by Energinet.dk:
1. Must have entered into the 'Agreement on balance responsibility'4.
2. Must be registered for VAT in Denmark or another EU member state or EEA country.
3. Must, if necessary, provide adequate security for its obligations according to the rules set out in chapter 4.2.
4. Must have completed a test approved by Energinet.dk of its communication with Ener-ginet.dk according to the rules set out in Regulation F1: 'EDI communication with the Dat-aHub in the electricity market' and Regulation F: 'EDI communication'.
5. Must submit the required master data electronically to Energinet.dk via the form 'Master data for balance responsible parties' available at www.energinet.dk.
4.1 Subscription and tariff5
BRPs must pay the following to Energinet.dk:
1. A monthly subscription.6
2. Tariff per purchased or sold MWh of balancing power in respect of consumption and/or trade.7
Balance suppliers must pay the following tariffs to Energinet.dk:
1. Tariff per MWh of metered production.8 2. Tariff per MWh of metered consumption.9
Subscriptions and tariffs are adjusted annually as of 1st of January, and the rates for the following year will be announced on Energinet.dk's website no later than three months before January 1st of the year in question.
4.2 Security
Generally, Energinet.dk makes use of credit insurance.
If the insurance company refuses to sign a credit insurance policy or offers partial credit insurance in respect of a BRP, Energinet.dk will, if necessary, ask the BRP to provide an on-demand guaran-tee corresponding to the lacking credit insurance or the remaining part of the credit insurance cov-er.
4.2.1 Credit insurance
The insurance company's granting of credit insurance to the individual BRP is based on an objective assessment of the BRP's creditworthiness on the basis of transparent and non-discriminatory prin-ciples.
4 The agreement can be seen in appendix 1.
5 The payments were previously referred to as fees. In connection with the introduction of the wholesale model, a distinction is made between subscription, fee and tariff. The three terms are defined in Regulation H3: 'Settlement of wholesale services and taxes'.
6 Amounts to DKK 1,500/month in 2015.
7 Amounts to DKK 1.00/MWh in 2015.
8 Amounts to DKK 0.59/MWh in 2015.
9 Amounts to DKK 1.31/MWh in 2015.
The BRP's creditworthiness is assessed using a points system based on an analysis of the following criteria:
1. Trend in company operations.
2. Trend in company cash flow.
3. Trend in company equity ratio.
4. Company group structure and capital structure.
5. Company owners.
6. Company business foundation.
7. Experience gained with how the company settles its obligations.
8. Developments in the company's home country.
The insurance company awards the individual criteria points from 0 to 10; 10 points being the highest:
- 0-31 points – no credit insurance.
- 32-55 points – partial credit insurance.
- 56-80 points – full credit insurance.
Credit insurance is not granted if just one of the eight criteria scores two points or less.
The awarding of points is generally based on publicly available accounting records and information material, but, in special complex cases, the insurance company may have to contact Energinet.dk with a view to collecting additional information about the BRP.
The credit insurance fixed may be changed at one month's notice if the insurance company finds that material changes in credit rating criteria have been made that change the creditworthiness of the BRP.
If the insurance company refuses to sign a credit insurance policy or reduces the credit insurance, the insurance company is under an obligation towards Energinet.dk to prepare a documented ex-planation of the refusal/reduction.
Special introductory terms apply to new BRPs. If the BRP has a Dun & Bradstreet (D&B) rating of at least A (1A international), the insurance company will grant the new BRP a credit insurance of up to DKK 7.5 million. However, the amount cannot exceed the maximum credit recommended by D&B.
4.2.2 Determination of credit line
The sum insured under the individual BRP's credit insurance must cover the BRP's credit line.
The total credit line for a BRP is determined as the sum of the BRP's credit lines for activities per-formed as BRP for consumption, BRP for production and/or BRP for trade, respectively, in DK1 and DK2, respectively.
BRPs for consumption
The credit line is determined as 5% of the previous month's consumption in DK1 and DK2 multi-plied by the current year's forward price for DK1 and DK2, respectively, as determined by Nord Pool on the last day of trading in November the previous year, but as a minimum DKK 2,000,000 for Denmark as a whole.
BRPs for production
The credit line is determined by Energinet.dk on the basis of the following calculated volumes for DK1 and DK2 multiplied by the current year's forward price for DK1 and DK2, respectively, as de-termined by Nord Pool on the last day of trading in November the previous year, but as a minimum DKK 2,000,000 for Denmark as a whole.
- Central power stations: 0.01 * monthly production (MWh).
- Local CHP plants: 0.05 * monthly production (MWh).
- Wind turbines: 0.2 * monthly production (MWh).
BRPs for trade
The credit line is determined by Energinet.dk at DKK 2,000,000 covering activities in both DK1 and DK2.
Energinet.dk may change the above-mentioned credit lines for production and consumption if the amounts, over a period of time, prove insufficient to cover the BRP's balance outstanding with En-erginet.dk, assuming a normal settlement frequency. In this situation, faster (perhaps daily) set-tlement will initially be used.
4.2.3 Release of security
Any security provided will be released on termination of the 'Agreement on balance responsibility'.
The security must be released no later than three months after the date of termination.
5. Change of BRP
In connection with any change of BRP, regardless of the cause, the old BRP is liable towards Ener-ginet.dk for any imbalances and must indemnify EnerEner-ginet.dk for any associated costs until such time as a new BRP has assumed liability towards Energinet.dk.
Changes of BRP for consumption and BRP for production are carried out by the balance supplier by reporting the change via the DataHub market portal.
5.1 BRP's assignment of 'Agreement on balance responsibility'
A BRP may only assign its 'Agreement on balance responsibility' with Energinet.dk to another BRP with prior written consent from Energinet.dk.
5.2 Change of BRP
A balance supplier can change BRP by giving 10 working days' notice with effect on any day.
If a balance supplier's agreement with a BRP is terminated and the balance supplier is unable to enter into an agreement with a new BRP, the balance supplier is responsible for reporting end of supply for all metering points for which the balance supplier is registered and for cancelling all re-ported future changes of supplier and all rere-ported move-ins.
5.2.1 Consumption metering points
A change of BRP for consumption is carried out for all current and future metering points to which the balance supplier supplies electricity or for which the balance supplier has reported a future supply of electricity; the change takes place per grid area.
5.2.2 Production metering points
A change of BRP for production is carried out for all or selected production metering points per grid area for which the balance supplier is registered as the balance supplier. It is not possible to re-port a change of BRP for production for production metering points for which the balance supplier has reported a change of supplier that can still be cancelled.
5.3 Termination of 'Agreement on balance responsibility' due to termination If the BRP or Energinet.dk terminates the 'Agreement on balance responsibility' by giving notice as stipulated in the 'Agreement on balance responsibility', the BRP is obliged to notify the parties for which the BRP holds balance responsibility about the termination and its consequences.
The parties involved may report a change of BRP according to the rules set out in chapters 5.2 and 5.3.
5.4 Termination of 'Agreement on balance responsibility' due to material breach In the event of material breach, Energinet.dk may terminate the 'Agreement on balance responsi-bility' with a BRP as stipulated in the 'Agreement on balance responsiresponsi-bility'.
Material breach exists if the BRP grossly or repeatedly disregards the terms and conditions of the 'Agreement on balance responsibility' or the rules in this Regulation C1 in general.
The following, among other things, is deemed to be material breach:
- Disregarding requirements for security.
- Disregarding requirements for reporting and communicating data and other information relevant to the balance responsibility.
On termination of the 'Agreement on balance responsibility', the BRP is relieved of the balance responsibility, and Energinet.dk will assume the balance responsibility until a change of BRP has taken place.
Balance suppliers for metering points for which the BRP is registered as holding balance responsi-bility will be notified by Energinet.dk that a new BRP must be registered. In connection with a change of BRP due to material breach, the time limits set out in chapters 5.2 and 5.3 are disre-garded. When the balance supplier has been notified by Energinet.dk that the situation requires a change of BRP, such change can be implemented subject to a notice of as little as one day;
Balance suppliers for metering points for which the BRP is registered as holding balance responsi-bility will be notified by Energinet.dk that a new BRP must be registered. In connection with a change of BRP due to material breach, the time limits set out in chapters 5.2 and 5.3 are disre-garded. When the balance supplier has been notified by Energinet.dk that the situation requires a change of BRP, such change can be implemented subject to a notice of as little as one day;