The GTS network must always be in balance; that is the reason why entry and exit volumes always have to be in balance. The rules set out on the Balancing regime web pages explain how GTS keeps its network in balance. Please take into account that when your programme is not balanced, this may have severe financial consequences.
A market-based balancing regime
This webpage describes in broad lines the current balancing regime and market model which came into effect on 1 April 2011 and underwent some changes on 3 June 2014 to comply with the European Network Code.
The gas transport network must be in balance so that gas can be transported safely and effectively. ‘In balance’ means that the transport network remains at the correct pressure and that the overall volume of gas removed from the network matches the volume entering it.
Each market party is responsible for the quantity of gas it removes or feeds in, which means that the market parties also share responsibility for maintaining the balance of the transport network. Parties know their own position (POS) at all times and are in that way able to contribute in keeping the transport network in balance. In addition, the balance situation of the total national network, or the sum of the positions of all parties, is publicly accessible at any time.
While the position of the total network remains within the permitted limits (dark green zone), the transport network is in balance and none of the parties needs to take any action. If the total transport network gets out of balance, market parties can intervene themselves by feeding gas into the transport network or removing gas from it. If this action is inadequate and the imbalance gets too big, a market-focused correction mechanism comes into play and we, the national network operator, buy additional gas or sell gas. The parties which cause the imbalance, pay the costs of the gas needed to resolve the imbalance.
How does this work in practice and in more detail?
Before the start of the gas day, shippers send GTS a programme showing their predicted hourly entries, exits and TTF deals for the following day. Shippers which supply small-scale users apply a damping formula to the programme, allowing them to feed in gas according to a pattern that is comparable to the pattern that is damped in the exit programme.
During the gas day, we compare this programme with the actual allocation on the basis of near-real-time data in order to determine the imbalances in the portfolios. The imbalances calculated for each portfolio are added up and divided with the parties on an individual basis via the imbalance signal in the portfolio (Portfolio Imbalance Signal, POS). The total of all individual POSs is called the System Balance Signal (SBS) and is published on the same timescale as the POS.
We monitor the SBS and take corrective action if necessary. If the SBS is not zero, this points to an imbalance in the system. The imbalance area is divided into zones. If the SBS is in the dark green zone, no balancing action is required. But if the SBS is in the light green, orange or red zone, a correction mechanism is triggered and gas is bought or sold on the within-day market of ICE Endex. We refer to this as a Within-Day Balancing Action (WDBA).
This balancing regime does not have a specific balancing period. Having a short or long position in a portfolio may not have any consequences for some time, provided that the SBS remains in the dark green zone.
If you would like to know more about specific parts of the balancing regime, go to:
- POS and SBS
- Within Day Balancing Action (WDBA)
- Offline settlement
- Linepack Flexibility Services
Would you like to read the complete terms and conditions? The balancing regime is described in the Transmission Code Gas TSO.
Q & A
Yes, traders also need to be informed about the balancing regime and needs to be able to receive and send all the related messages.
Although, fundamentally, a trader will not experience imbalances quickly, it may be the case that an imbalance occurs between entry and exit in the portfolio, e.g. due to incorrect portfolio management or an error in the nominations/confirmations with counterparties.
If you want to become an offeror on the gas exchange you must satisfy a number of requirements. Click here for the website of ICE Endex. If you can trade on the exchange of ICE Endex that is sufficient to offer flexibility to the gas exchange in the run-up to a balancing action. GTS does not propose any additional requirements.
In principle, your POS is never reset. Settlements having an effect on the POS are WDBA’s. It is only when a WDBA is performed that volumes are set off pro rata against the positions (POSs) of the causers. Shippers with a position opposite to the SBS at the time of the balancing action are not affected.
We disclose the size of the zones per hour, based on the estimated transport load (with regard to the programmes delivered by the Shippers), at least two hours before the beginning of the gas day. These hourly values will not be changed after they have been published.
No, you are only obliged to apply damping if you transport gas to exit points that deliver to domestic consumers.