Imbalance Pricing
The settlement mechanism for energy deviations. Understanding Single vs. Dual Pricing, NIV, and PAR.
The Role of Imbalance Settlement
Balance Responsible Parties (BRPs) must match their supply/demand portfolio. Any deviation is settled at the Imbalance Price. This price reflects the cost incurred by the TSO to restore system balance.
Single Pricing (Target Model)
Used in most EU markets (EBGL requirement).
- Short BRPs pay the Imbalance Price.
- Long BRPs receive the Imbalance Price.
- Incentive: "Passive Balancing". If the system is Short, being Long helps the system and is rewarded with a high price.
Dual Pricing
Used to penalize deviations regardless of system state.
- Short BRPs pay a high penalty price.
- Long BRPs receive a low price.
- Incentive: "Stick to Schedule". Deviating is always costly, even if it accidentally helps the TSO.
Disclaimer: This guide is provided for educational purposes only and is not an authoritative source. While we strive for accuracy, some definitions and figures may be simplified or approximate. For professional or regulatory purposes, please cross-check information with official documents from ENTSO-E, national regulators, or academic publications.