Balance group model

The balance group model is pivotal to Austria’s liberalised energy markets.

Alongside the unbundling of system operation, the introduction of the balance group system was one of the key structural changes made when the country’s energy sector was opened to competition. It created the conditions to emulate the Nordic balancing model.

The model is designed to:

  • Balance physical injection into and withdrawals from networks;
  • Provide balancing energy to meet the difference between forecast and actual electricity infeed and offtake;
  • Create a means of balancing energy clearing and settlement, and related services.

For a system like this to work, generation, transmission and distribution system operation, and wholesaling must be unbundled, and generators and consumers brought together in balance groups.

Market players

Electricity market liberalisation resulted in the emergence of new market players, with differing roles and responsibilities. These are the:

  • System operators – the companies that run the transmission and distribution networks. Electricity at medium and low voltages is transported across distribution networks to supply consumers. Transportation between regions and countries is the job of the interconnected high-voltage transmission networks.
  • Control area manager – the company responsible for load frequency control in its control area (in principle this role can also be performed by a third party). APG is the control area manager for the whole of Austria.
  • Balance groups – virtual groups of suppliers and consumers within which electricity supply and demand are balanced. The balance group representatives front their groups in dealings with other market participants.
  • Clearing and settlement agent – the firm that looks after balancing energy transactions and pricing. The clearing and settlement agent uses the data sent to it by the system operators and other market participants to calculate their net balancing energy use, and establishes the latter’s pricing. It also settles the internal transactions in the balance groups, and provides them with administrative support. In Austria, there is one clearing and settlement agent, for the APG, Tyrol and Vorarlberg control areas. The operator of a clearing and settlement agent is the balance group coordinator.

Click here for the current version of the general terms and conditions of the balance group coordinator, and the annexes thereto.