What is the imbalance market in the Netherlands?

The electricity grid must be in balance every second. If it isn’t, TenneT steps in and pays for it. Here you can read how that system works, and how businesses benefit directly from it.

Whatever is fed into the grid must be consumed at the very same moment. That sounds simple, but in practice, actual demand almost always deviates from the forecast. An industrial freezer switches on unexpectedly. A solar farm generates less power due to cloud cover. A large factory experiences a breakdown.

All these small deviations add up. If supply and demand are not in balance, the grid frequency fluctuates. It must always remain at 50 Hz. If the frequency drops too far, there is a risk of a blackout.

TenneT is the national grid operator. It monitors the frequency 24/7 and has the authority to call upon parties that can quickly supply or draw power. TenneT does this via three markets.

• Day Ahead: The day before, an hourly price is set via an auction (EPEX Spot). 
• Intraday: During the day, deviations from the day-ahead schedule are adjusted. 
• Imbalance market: Real-time adjustment by TenneT. Parties that directly supply or consume power are rewarded or penalised for causing an imbalance. 

Enova trades on behalf of its clients in all three markets simultaneously. 

Every party that feeds energy into or draws energy from the grid has what is known as a programme. This programme specifies, on a quarter-hourly basis, how much power they expect to generate or consume. If the actual figures deviate from the programme, an imbalance arises. TenneT records this on a quarter-hourly basis and calculates an imbalance charge, which is either positive or negative, depending on the direction of the deviation.

1. Submitting a nomination
   Each BSP submits an expected consumption or generation programme to TenneT every quarter of an hour. This is called a ‘nomination’. Based on this, TenneT plans the grid balance.
2. Monitoring real-time deviations
   During the quarter of an hour, an EMS (energy management system) monitors what is actually happening. Does the actual situation deviate from the nomination? Then there is an imbalance.
3. TenneT intervenes
   TenneT sends a signal to BSPs with available control power. Parties that respond quickly, by consuming or generating more, are rewarded with the imbalance payment.
4. Settlement every quarter of an hour
   After every quarter of an hour, TenneT settles the deviations. The price per kWh can vary greatly, from a few cents to tens of euros per MWh, depending on the scarcity on the grid.