National Grid confirms pan-European balancing market launch delayed

It said French transmission system operator RTE is ‘experiencing difficulties’ with its implementation of Project TERRE

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The launch of a new pan-European balancing market that is expected to deliver €13 million (£11.6m) a year in consumer benefits has been delayed.

National Grid Electricity System Operator (ESO) said Project TERRE (Trans European Replacement Reserve Exchange), designed to establish a new replacement reserve balancing product in participating countries across Europe and due to go live in December 2019, has been delayed by six months to June 2020.

That is the result of French transmission system operator (TSO) RTE requesting a 12-month derogation “due to experiencing difficulties with their implementation” – the UK’s route to trade on TERRE is only via France.

The project is a collaboration between National Grid ESO and other TSOs in Czech Republic, Italy, Poland, Portugal, Spain and Switzerland to create a joint European balancing market.

Richard Smith, Head of Commercial at National Grid ESO said: “We have not taken the decision to request a derogation lightly, however, this is based on us being unable to realise the €13 million per annum GB consumer benefits of going live without being able to access Replacement Reserves from other European TSOs.

“In addition to not being able to realise the benefits, there may be a cost to consumers from starting to use the platform. The majority of other TSOs have also decided to delay their go-live date, with only one TSO (Czech Republic) now planning to go live in December 2019.”

National Grid ESO, however, added it is not pausing work on its IT systems and will ensure they are ready to implement when RTE goes live with TERRE.

UK aggregator and technology firm KiWi Power said the news was “disappointing”.

Jonathan Ainley, Head of Public Affairs and UK Programme Manager added: “It’s vital that this extra time is used wisely so that the market and systems that support it are ready to go from day one and flexibility providers can finally compete on an equal footing with incumbent utilities and generators.”

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