energy - generation

What is TERRE?

Introduction to TERRE

The Trans-European Replacement Reserve Exchange or TERRE is an European platform called LIBRA for trading reserve electricity with electricity Transmission System Operators (TSOs) in nine participating countries, including the UK.

The project will implement a new Replacement Reserve balancing product developed by the European Network of TSOs for Electricity (ENTSO-E) the participating or member countries are:

  • United Kingdom
  • France
  • Italy
  • Spain
  • Portugal
  • Switzerland
  • Romania
  • Hungary
  • Bulgaria

The LIBRA platform has gone live and is being used by the Czech Republic in its own market. Spain and Portugal are expected to go-live in early March ’20 facilitating cross border trading for the first time. The UK and France will go live in June ’20 and Italy and Switzerland may go-live at the same time.

All TERRE participating Balancing Service Providers (BSPs); defined as a market participant with reserve-providing groups able to provide balancing services to TSOs; can submit bids to National Grid ESO (NGE) on an hourly basis to fulfil 15 minute delivery periods. TERRE will also remove all Balancing and Settlement Code (BSC) barriers to customers and independent aggregators participating directly in the Replacement Reserve (RR) Market and in the existing Balancing Mechanism (BM) thereby facilitating Wider Access.

TERRE is required to fulfil requirements on TSOs from European legislation through the European Electricity Balancing Guideline. The guideline requires those TSOs that use RR balancing products (balancing energy products with a >15 minute lead time) as part of their system balancing regime to implement and make operational a new European platform, LIBRA, for the exchange of energy.

The mechanisms for TERRE will be similar to how Bid-Offers submissions are used in the BM. TERRE will also feed into the BSC calculations of imbalance prices and volumes.

Brexit

The impact of Brexit on TERRE is dependent on whether Great Britain leaves the EU with a deal or not.


No-deal
Market participants will not be able to participate in TERRE.
It is however expected that participants will be able to enter TERRE at some point in the future once a post no-deal framework is agreed.


Transition Period
Should the relationship not be agreed before the end of the Transition period, the UK will leave the EU without a deal i.e. a no-deal Brexit and as such, GB market participants will not be able to participate in TERRE from exit day.

UK Market Rules

Wider Access requires the BSC to facilitate demand response participation in TERRE. This includes independent aggregation facilities and energy storage.

Independent aggregators are defined as parties who bundle changes in consumer’s loads or distributed generation output and who do not simultaneously supply the customer with energy.

This requires BSC changes to facilitate independent aggregators’ participation in TERRE outside of existing arrangements.

A new BSC party has been created to recognise this rule, the Virtual Lead Party (VLP) which has subtly different charging regimes and obligations to recognise their role offering balancing energy in TERRE (and/or the BM).

If a participant wishes to participate in other aspects of the BSC, such as trading in wholesale markets, they have to qualify under the traditional routes.


Secondary BM Units
As part of Wider Access, BSPs wishing to participate in TERRE will be required to register a BMU containing the assets (generation or demand side response) that will be used to deliver RR.

Suppliers will be able to participate using existing Additional BMU registration and Generators will be able to use Central Volume Allocation (CVA) BMUs.

A new type of BMU, a Secondary BMU (SBMU), has been created for use by VLPs. SBMUs will have the option to participate in both TERRE and the Balancing Market at the same time.

VLPs register SBMUs based on a simplified Additional BM Unit registration process. Unlike BMUs and Additional BMUs, SBMUs are not required to submit Generation Capacity, Demand Capacity and Market Domain Data.

Follow this link for more details on the market entry process for Wider Access.


TERRE Bidding
TERRE bids differ from the Bid/Offer ladders in the BM by removing mandatory dependency between the two. Independent bids Up or Down may be submitted.

The following bid formats will be permitted in LIBRA:

Type Parameters Definition Delivery Period (minutes) Notes
Divisible Offers Single quantity, single price A divisible offer is a balancing energy offer that consists of a single quantity and a single price.
A divisible offer can be accepted in part quantity however the same quantity must be accepted for the whole submitted delivery period.
15, 30, 45 or 60 A BSPs can also define a minimum quantity.
If the offer is accepted then a volume greater or equal to this minimum quantity will always be accepted.
Indivisible Offers Single quantity, single price An indivisible offer is a balancing energy offer that consists of a single quantity and a single price. 15, 30, 45 or 60 The difference between a divisible and an indivisible offer is that LIBRA can accept either the whole quantity of the indivisible offer or nothing.
Exclusive Offers Time or volume Only one (or none) of the exclusive offers can be activated; hence, the activation of a sub-offer belonging to an exclusive offer excludes the activation of the other sub-offers belonging to the same exclusive offer.
Exclusive offers can either be divisible or indivisible offers.
15, 30, 45 or 60 The number of sub-offers of each exclusive offer (that may be compounded of indivisible and divisible offers) is likely to be limited by LIBRA.
Multi Part Volume Offers Variable prices for variable volumes and a single delivery period Price can either decrease or increase as the volume increases. 15, 30, 45 or 60
Linking Offers Time or volume A sub-offer of a linking offer is activated if another sub-offer of the same linking offer is not activated.
A sub-offer of a linking offer is not activated if another sub-offer of the same linking offer is activated.
For offers linked by volume, the same portion of two linking offers will always be activated.

NGE is likely to provide a subset of the above bidding options pending systems being updated to handle the more complex options.

Accepted bids by NGE will be instructed via EDL messages either via Wider Access APIs or fixed line communications.

Genstar4 will support NGE’s implementation of TERRE when it is launched in the UK in 2020.

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